STATE OF THE MARKETS

Stocks rallied ahead of the election. US stocks continue the rally from Friday, after NFP revealed higher unemployment that may prompt the Federal Reserve to hold its aggressive rates hike plan. Blue chip Dow (+1.31%) advanced the most, followed by S&P (+0.96%), Nasdaq (+0.85%) and Russell (+0.55%) as sentiments turned bullish ahead of the US midterm election on Tuesday. Bonds were sold off, sending yields higher, with the 10Y benchmark jumping back near 4.23% as the Dollar index dropped further below the 110.20 barrier.

In the commodity markets, crude opened with a gap lower after news of China’s uncertainty over its strict Covid policy. The black gold jumped back to $92.90/bl before settling lower around $91.12/bl as New York closed. Gold was little changed on Monday after the rally on Friday after bidders continued to support the metal around $1,660-1,665/oz. Elsewhere, Dollar weakness helped buoy iron ore back above $85.10/tn after weeks of slump on weaker demand.

In the FX space, long term sentiments remained bullish as the safe-haven trio were offered while Kiwi, Sterling, Euro and Loonie remained in demand. Medium term accounts seem more cautious as Yen advanced further in the demand territories alongside Kiwi, Aussie and Euro. Short term traders were quick to bid the oversold Sterling, Aussie and Euro while offering Swiss, Loonie and King Dollar.

On Tuesday, markets look to position for a split congress as stocks usually rally after midterm elections. Earnings releases to watch include Walt Disney (DIS), Occidental Petroleum (OXY), DuPont (DD), Constellation Energy (CEG), Lucid Group (LCID), Akamai Tech (AKAM) and Plug Power (PLUG) as well as the small business optimism index. It would be a long night on Tuesday or even days for investors waiting for the midterm election results.

OUR PICK – No New Pick

We stay on the sideline for now. Expecting choppy markets as the US geared up for the midterm election, we 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.