OUR PICK – No New Pick

No new pick going into the weekend. The Fed’s announcement alone to taper the balance sheets has caused bonds to be sold off and commodities to pull back in favor of the higher yielding Dollar. Given 8.5% annual inflation and 2.95% 10Y coupon, real yields remained in negative territories. That is why investors continue to be vested in equities, especially dividend paying and value companies. The US may have to follow the Swiss and Japanese in solving their ever expanding debt. Negative rates policy might be near if the Feds failed to raise rates to match inflation.

Trades updates: 

Equities: AUY (19% undervalued, 1.98% yields) remained well bid and we expect to meet the final target in the coming weeks. We remain bullish CTRA (COG) (20% undervalued, 1.94% yields) and revised target to $35.30, T (23% undervalued, 5.71% yields) fell after Wells Fargo revised target lower to $21, MO (21% undervalued, 6.50% yields) has reach first target and we update stop to $54, VIPS (47% undervalued with 4.79 z-score) remained well bid after UBS maintain neutral rating but reduced target by 10 cents, CRON (22% undervalued with 27.69 z-score) and WBA (31% undervalued, 4.08% yields) had pulled back and now back around $47 – the level after news of potential bids from India’s Reliance.

FX & Commodities: We may re-enter silver, AUD/CAD and AUD/USD have reached their first target.

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Risk Disclaimer:

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.