NASDAQ took turns to punch new record high. The tech-laden NASDAQ (+1.37%) finally took its turn to punch new record high on Thursday, following Dow (+0.67%) and S&P (+0.98%) a few days back, on the back of strength in FANG and semiconductors stocks. Dollar fell sharply to 93.50 handle after US GDP missed estimates (2.0% vs 2.7%) forcing yields to rise as markets speculate that Feds might delay rate hike. The 10Y benchmark is back at 160 basis points at writing.
In the commodities market, crude was pushed lower to $80.10/bl before settling at $82.50 as news hit the wires that the Iran nuclear deal would come back in November. Gold advanced higher, settling at $1,798.35/oz as New York closed, after missed US GDP might trigger fresh inflation concerns. The sharp reduction in US GDP (2.0% vs 6.7%) reverberates to Iron Ore then trended lower to $121.68/tn.
In the FX space, Swiss seized the helm of demand in short and medium term accounts as traders and investors turned cautious. Euro flipped to demand as King Dollar lost bids post GDP report and Loonie’s strength was short lived after BoC signaled sooner than later in tapering and rate hike. Long term sentiments were unchanged. On Friday, markets look for consumer sentiments and more earnings reports from Chevron (CVX), Colgate-Palmolive (CL) and Royal Caribbean (RCL) to name a few.
OUR PICK – No New Pick
No new pick going into the weekend. More than $42 billion flowed to short-term money markets, after an outflow of about $4.2 billion from US equities went to taxable bonds by about the same amount. Foreign equities trading on the US exchanges also reported an outflow of about $178 million. It seems that smart money continues to liquidate their long term holdings as markets make new highs and this coincides with the strength in Swissy this month. More insights to come and have a wonderful weekend!
Trades updates:
Equities: Currently we are holding 8 stocks – 7 longs and 1 short. We are long AUY (21% undervalued) with dividends yielding 2.83%, T (19% undervalued) at 8.14% yields and COG (CTRA) (13% undervalued) yielding 2.01%. 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 (47% undervalued with 1.28 z-score) and CRON (18% undervalued with 9.18 z-score) while bearish GE (19% overvalued with 1.43 z-score).
FX & Commodities: Though AUD/CAD has reached all targets, two trades of EUR/CHF and a short in XAU/USD didn’t quite work out as planned. Following our rules of three strikes and you are out, we have no new pick until after NFP Friday next month.
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.