STATE OF THE MARKETS

Stocks extend losses amid hawkish Feds. US stocks tumbled further on Monday after major central banks decided to keep rate hikes on schedule during the Jackson Hole symposium over the weekend. Nasdaq (-1.02%) fell the most, followed by Russell (-0.89%), S&P (-0.67%) and Dow (-0.57%) as investors dumped bonds and Dollar in a month-end rebalancing. As at writing, 1Y notes yield 3.45% with the 2Y at 3.42% and the 10Y benchmark at 3.06% as the Dollar was sold and settled below the 108.80 barrier.

In the commodity markets, crude rebounded and settled above $96.55/bl amid OPEC willingness to cut production and new conflict in Libya that may disrupt supplies. Gold was under pressure, but on firm bids above $1,720/oz as investors watched the new US-China tension on Taiwan. Elsewhere, iron ore continues to drift lower on global recession fears. The commodity settled below $105.30/tn as New York closed.

In the FX space, sentiments seemed bullish as Aussies continued to hold the helm of demand while demand for safe-haven Swiss and Yen retreated across all horizons. Month end rebalancing saw Dollar sold off in the short and medium term accounts while in heavy demand on the long term.

On Tuesday, markets expect a cautious trading ahead of the Labor day weekend while looking for earnings reports from Bank of Montreal (BMO), Baidu (BIDU), CrowdStrike (CRWD), HP Inc (HPQ), Hewlett Packard (HPE), Best Buy (BBY) and Chewy (CHWY) as well as the latest numbers on US home price index, job openings and consumer confidence.

OUR PICK – No New Pick

We stay on the sideline. With VIX above 25, we see choppy markets ahead and decided to stay on the sideline for now.

For high probability picks, please use our Trading Central services. You could also join us at MFM’s TradeCopy

Disclaimer:

This article is for general information purpose only. It is not an investment advice or a solicitation to buy or sell any securities. 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.