STATE OF THE MARKETS

Stocks mixed amid safe-haven flows. US stocks closed mixed on Wednesday after investors were spooked with Netflix (NFLX) missed revenues estimates and reported a significant falloff in subscribers. Dow (+0.71%) and Russell (+0.37%) eked minor gains while Nasdaq (-1.22%) and S&P (-0.06%) closed in the red as Dollar eased amid safe-haven flows. The Dollar index dropped to 99.80s before settling higher at the 100.20 mark as bonds demands sent yields lower with the 10Y benchmark settling around 2.83%

In the commodities market, crude was well bid and resilient to close unchanged around 102.25/bl while gold rebounded and closed higher above $1,957.40/oz as inflation concerns continue to plague markets. Elsewhere, iron ore pulled back to deeper support as investors weighed the impact of diminishing global growth. The commodity settled lower, around $154.40/tn as New York closed.

In the FX space, the comdolls trio remained in the helm of demand for the short and long term as Kiwi ousted King Dollar to the offer territories. Demand for Euro returned in the short and medium term as King Dollar retreated. Markets are seemingly looking for a reason to buy more Yen than Swiss.

On Thursday, markets continue to look for progress in the peace talks while waiting for earnings reports from Blackstone (BX), Dow Chemical (DOW), Nucor (NUE), American Airlines (AAL), Freeport-McMoran (FCX), Danaher (DHR) and Philip Morris (PM) as well as the latest US jobless claims, manufacturing index and leading indicators to assess the health of the US economy.

OUR PICK – XAG/USD

Markets are overbidding precious metals. The past few weeks have seen stronger flows to precious metal funds (GLD, SLV) and mining stocks (GDX) than to the aggregate US bonds funds (AGG) and the bullish Dollar funds (UUP). The last few days, we have seen a reverse flow to the safe-haven Yen funds (FXY) that seemingly signaled that the rise in precious metals is far from over in our opinion.

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This article is for general information purpose only. It is not an investment advice or a solicitation to buy or sell any securities/oz. Opinions expressed are of the authors and not necessarily of MFM Securities Limited or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.