STATE OF THE MARKETS

Stocks up amid flight to safety. US stocks closed higher on Wednesday despite flows to bond safety after release of the FOMC minutes that showed the Federal Reserve’s commitment to control inflation as they agreed to slow the pace of the hikes. The small cap Russell (+1.25%) climbed the most, followed by S&P (+0.75%), Nasdaq (+0.69%) and Dow (+0.40%) as yields dropped further on bond demand. The shorter 2Y drifted to 4.36% while the longer 10Y tumbled to 3.69% as the Dollar continued to hold steady above the 104.20 barrier.

In the commodity markets, crude oil continues to fall below $73.30/bl after news of demand concerns amid rising Covid cases in China. Flight to safety was also evident in gold that spiked to near $1,865/oz before settling lower around $1,854.05/oz as New York closed. Elsewhere, iron ore pulled back to $115.35/tn after breaking the $117.80 barrier as speculators took profits off the table.

In the FX space, short term traders were quick to sell the overbought Yen and Dollar while demanding the oversold Aussie and Loonie. Yen continued to reign in the medium and long term accounts while King Dollar and Loonie were sent to the back burner. Sentiments seemed bearish after the Swiss advanced further in the demand territories across the board.

On Thursday, markets may remain choppy as long term investors look to cash out on further rally in equities while short term traders may look to scoop some bargains as players continue to digest the Federal Reserve’s plan going forward. Earnings releases to watch include Constellation Brands (STZ), Walgreens Boots Alliance (WBA), Conagra Brands (CAG), RPM International (RPM) and Lamb Weston (LW) as well as the latest US jobless claims and ADP employment data. The EIA petroleum status report will be in the spotlight for energy traders.

OUR PICK – No New Stock Pick

No new stock picks amid volatile markets. Markets are in limbo trying to figure out the next move for the Federal Reserves. The minutes vowed for inflation control though members agreed to slow down the pace of the hikes. We stay on the sideline for now.

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.