STATE OF THE MARKETS

Markets jittered as the cease-fire failed. Global markets from Asia, Europe and the US wavered as news hit the wires that cease-fire talks have failed and Russia has moved its warships towards the coast. FTSE (-2.57%), DAX (-2.16%) and Stoxx (-2.01%) were all in the red, followed by Dow (-0.29%), S&P (-0.53%), Nasdaq (-1.56%) and Russell (-1.29%). Nikkei (-2.36%) and Hang Seng (-2.50%) continue to slide in early Friday trading.

Safe havens demand returned, sending yields lower at writing. The shorter 2Y fell to 1.44%, 5Y to 1.61% and the longer 10Y to 1.72% while the 30Y to 2.14%. Gold was fixed higher and pierced the $1,950.80/oz barrier in early Friday while the Dollar index gaped open above the 98 handle.

In the commodities market, crude spiked to above $114.50/bl before settling lower around $106.45/bl after the US and Iran were said to reach a deal soon. Gold was fixed higher around $1,935.50/oz before spiking higher close to $1,950.80/oz after reports of failed cease-fire hit the news. Elsewhere, iron ore climbed further to $151.10/tn as inflation concerns continue to plague markets.

In the FX space, fears of global economic crunch amid the on-going Russia-Ukraine war continue to send strong bids to commodity currencies. Aussie and Kiwi continue to lead demand across all horizons while Euro and Sterling were heavily sold.

On Friday, the war will continue to be in the spotlights while markets look for earnings reports from Annovis Bio (ANVS), Great Elm Capital (GECC), Hibbett (HIBB), inTest (INTT), Inuvo (INUV), Mammoth Energy (TUSK) and OFS Capital (OFS) as well as the very much awaited US non-farm payroll and job markets data.

OUR PICK – No New Pick

No new pick going into the weekend. The war has triggered massive inflows to commodity and commodity linked assets and spurred the flows that were once gravitating around inflation concerns. Though the week ending 2nd March saw more outflows from the US equities, around $4.1 billion, and $5.1 billion flowing out of taxable bond funds; $39.5 billion flowed into short term money markets on top of $6.3 billion last week. The search for value and income continues while growth shifts to the back burner.

Trades updates: 

Equities: We expect profit taking in AUY (18% undervalued, 2.33% yields) and pullback to $4.50, we remain bullish COG (CTRA) (13% undervalued) yielding 2.35%, T (19% undervalued) at 8.70% yields, MO (20% undervalued) at 6.77% yields, VIPS (47% undervalued with 5.98 z-score) and CRON (17% undervalued with 9.18 z-score).

FX & Commodities: No new picks.

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