State of The Markets | Dollar Rallied On Strong Retail Sales


Dollar rallied on strong retail sales. US stocks closed higher on Tuesday, with Dow (+0.15%), Nasdaq (+0.76%) and S&P (+0.39%) back flirting with their respective record highs, as Dollar continued to rally past the 96 handle on the back of strong US retail sales. Bond demand eased sending yields higher, with the 10Y benchmark piercing 165 basis points.

In the commodities market, crude was in a tight range before falling to $79/bl as investors fear an increase in production and rising Covid cases in Europe. Gold eased further as profit taking continued, closing the day with bearish hammer around $1,850.40/oz. Elsewhere, iron ore continues to flirt around the $92.00/tn mark as the US infrastructure bills remain in limbo.

In the FX space, short term traders sent Sterling to the helm of demand as speculation on BoE rate hike continues. Loonie was seen synching across medium and long term accounts as investors continue to bid for higher yielding currencies. Aussie and Kiwi were all over the place but remain favored in the long term accounts. On Wednesday markets look for earnings reports from Baidu (BIDU), Lowe’s (LOW) and NVIDIA (NVDA); on top of US housing data. EIA petroleum status will be in the spotlight for oil traders.

OUR PICK – No New Stock Picks

No new stock picks as we are at maximum equities exposure. Currently we are holding 8 stocks – 7 longs and 1 short. We are long AUY (18% undervalued) with dividends yielding 2.67%, T (21% undervalued) at 8.43% yields and COG (CTRA) (8% undervalued) yielding 2.38%. CLVS is currently 21% overvalued with -7.19 z-score but Tudor Investment had stepped in recently and we decided to hold. We remain bullish with VIPS (44% undervalued with 5.59 z-score), GT (40% undervalued with 1.28 z-score) and CRON (16% undervalued with 9.18 z-score) while bearish GE (15% overvalued with 1.43 z-score).

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Note: Cabot Oil & Gas (COG) recently merged with Cimarex Energy to form Coterra Energy (CTRA).


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.