State of The Markets | Markets On Defense Amid Feds Minutes

STATE OF THE MARKETS

Markets on defense amid Feds minutes. Markets continue to be at an impasse on Wednesday, as investors battled between strong economic growth and rising interest rates after Feds released its minutes. Dow (+0.05%) and S&P500 (+0.15%) edged higher, while Nasdaq (-0.07%) and Russel 2000 (-1.60%) headed lower in a session led by communication, energy and financial. Utilities, consumer staples and IT still led the month as yields trending lower. The benchmark 10Y yield was as high as 1.78% last week before it fell to as low as 1.63% on Wednesday and settled around 1.68% as New York closed.

Crude has been in the limbo for the past two weeks, trading within $62 – $57.20/bl band, as dealers continue to absorb orders on lower bids, amid the demand concerns come May when OPEC+ decided to hike supply. Gold returned to selling pressure as short-term trader took profits of the table. The yellow metal closed below $1,740/oz on a moderate volume.

In the FX space, safe haven Swiss seized the helm of demand across the board in the least expected move as markets ran on defense. King Dollar and Yen advanced further in the demand territory as to what appears to be a risk-off mood, after the commodity currencies were sent to the back burner for the short and long term accounts. The risk off appears imminent as Euro continues to overbid Sterling. If this trend continues, we might see a heavy exodus from equities soon.

OUR PICK – SIRIUS XM (SIRI, NASDAQ)

Low risk, high reward. When satellite radio was introduced back in the 90s, Sirius XM was as much a hype as Tesla is today. The stock went from $6 to almost $70 in over 5 years after its debut in 1995. As the craze faded, and people realized it’s still just a radio, price plummeted to less than a Dollar. In the last 10 years, it’s probably the most boring stock of all time with only 15% institutional participation. However, recent earnings that beat analysts estimates, propped price from $6 to $8 with only 30 cents risk per share in just a week.

The only problem was the company made more revenues, yet earn less income; hence the negative sentiments. But bear in mind that this is a 25 year old company that is trying to re-invent itself in a niche market. Recent pick-up in music streaming demands and new channels with Disney may see the company prosper. The dividend yields is less than 1% but it’s increasing for the past 5 years. We like this stock.

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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.