STATE OF THE MARKETS
Stocks mixed ahead of FOMC minutes. US stocks closed mixed on Tuesday ahead of the latest release of FOMC minutes on Wednesday. Dow (+0.15%) eked minor gains while S&P (-0.81%), Nasdaq (-2.35%) and Russell (-1.56%) closed in the red as the Dollar index continued to fall below the 102 handle. Flight to safety was evident as yields fell across the board with the 10Y benchmark back below 2.75% at writing.
In the commodities market, new US restrictions on exports sent crude lower to $107.90/bl but Dollar weakness continued to float the black and bid above $110/bl at writing. Similarly, gold continued its upward trajectory to settle higher, above $1,866.30/oz as New York closed. Elsewhere, iron ore fell to $133.30/tn as global growth concerns weigh on demand for the metal.
In the FX space, short and medium term accounts turned bearish amid speculation of a hawkish Fed’s minutes. Safe-haven Yen and Swiss reign in demand alongside Euro while long term sentiments were unchanged.
On Wednesday, markets are expected to remain cautious while looking forward to earning reports from NVIDIA (NVDA), ■■■■’s Sporting Goods (DKS), Box (BOX), Snowflake (SNOW), ViaSat (VSAT) and Williams-Sonoma (WSM) as well as the latest figures in US mortgage applications, durable good orders and the much awaited FOMC minutes. The EIA petroleum status report will be in the spotlight for energy traders.
OUR PICK – No New Pick
We stay on the sideline. Recession fears are plaguing the market right now as inversions between 5Y (2.74%), 7Y (2.77%) and 10Y (2.74%) are holding back long term investors from putting serious money to work. With VIX elevated at above 30 and highly likely to break to the upside, we decided to stay on the sideline for now.
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Risk Disclaimer:
This article is for general information purpose only. It is not an investment advice or a solicitation to buy or sell any securities/oz. 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.