STATE OF THE MARKETS
Markets cashing out post FOMC. US investors seemed to be cashing out of the equities markets as Dow (-0.48%), Nasdaq (-0.28%) and S&P500 (-0.08%) all edged lower as New York closed. Breadth however, was marginally positive with energy, communication and financial sectors taking the lead. More than $400 billion worth of block orders flowed into the treasuries futures as the 10Y yields hit 1.65% before settled around 1.61%.
Crude continues its upward trajectory, hitting $64.50/bl after news hit the wires that US inventories built was better than expected. 100,000 barrel compared to 594,000 previously as markets expected a built of 659,000 barrels. Gold reversed its earlier losses, closed with a bullish hammer around $1,784/oz after Feds signal no tapering anytime soon.
The move pushed King Dollar lower, with DXY broke 91 mark and settled close t0 90.50, benefitting mostly Kiwi, Loonie and the Euro. Long term accounts seemed more cautious as Swiss and Yen edged higher towards demand. Sterling lost its appeal in the short term accounts as it turned on offers, while Aussie regained its earlier losses from the dismal inflation. Long term sentiments looked bearish, but short to medium terms remain bullish as New York closed.
OUR PICK – Kraft Heinz (KHC, NASDAQ)
Will earnings continue to beat estimates? Back in November last year, our pick KHC rallied as expected and took a breather for a re-entry before rallying again to hit close to $42/share. The company has beat estimates for the past three quarters and Thursday (29/4) will be a witness if the company can do it again. The pandemic has seen many people stock up processed foods and that translate to higher revenues for company like Kraft Heinz. With close to 4% yields, the stock sure is attractive to income investors as we have seen 2.3 million of institutional net purchase as of last quarter. Nevertheless, short to mid term sentiments have turned bearish; so this might be the last run to the upside if earnings have positive surprise. Else, we favor a sell stop @ 39.70.
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.