STATE OF THE MARKETS

Stocks fell amid rising yields. US stocks fell on Monday as smart money continues to cash out on portfolio rebalancing as October comes to an end. The tech-laden Nasdaq (-1.03%) fell the most, followed by S&P (-0.75%) and Dow (-0.39%) though the small cap Russell was unchanged. Investors seemed to be on the sideline as bonds lost bids and sent yields higher across the board, with the 10Y benchmark back above 4%. The Dollar index rallied for the third day and closed above the 111.50 minor handle.

In the commodity markets, crude pulled back near $84.80/bl on demand concerns after China announced a new lockdown. Dollar strength dragged major commodities lower with gold to $1,633.30/oz and iron ore to $92.40/tn.

In the FX space, overall sentiments turned bullish as demand for Kiwi and Aussie gained momentum across the board while Dollar, Swiss and Yen retreated in the long term. Short and medium term accounts, however, were seen bidding more Yen than Swiss and Dollar.

On Tuesday, markets will be focused on the FOMC meeting on Wednesday that already priced a 75 points hike. This is the busiest week for Q3 earnings which could helped buoy stocks on upbeat earnings especially from Eli Lilly (LLY), Pfizer (PFE), British Petroleum (BP), Advanced Micro Devices (AMD), Mondelez (MDLZ), Airbnb (ABNB), Marathon Petroleum (MPC), Devon Energy (DVN) and Electronic Arts (EA). Investors also look ahead to the release of the ISM manufacturing index and jobs opening as the FOMC meeting begins today.

OUR PICK – Cronos (CRON, NASDAQ)

We reiterate our long term bullish sentiments. Back in September we noticed accumulation in CRON as the stock was 18% undervalued. Recent markets’ rout sent the stock below $3 before the US Senate Majority Leader, Chuck Schumer (D-NY) touted that congress is “very close” to passing a marijuana bill and weed stocks jumped. S&P GMI currently rate the stock at 31% undervalued which put the fair value around $4.30

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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.