STATE OF THE MARKETS
Stocks reached records as NFP looms. US major indexes, S&P (+60%) and Nasdaq (+0.78%), reached record high, while Dow (+0.78%) climbed higher after reports showed that more people are off the unemployment benefits last week prior to the NFP figure on Friday. Optimism sent less demand for bonds, forcing the 10Y benchmark to yield higher to 1.23% from 1.18% the day prior as the Dollar remained unchanged around the 92.25 mark.
In the commodities market, crude futures pared earlier losses after reports of increasing tension in the Middle East after an attack on a tanker last week. The black gold settled above $69.05/bl as New York closed. Gold nudged lower, but remained well bid above $1,800/oz, as optimism build pre NFP that unemployment will fall from 5.9% to 5.6%
In the FX space, short and medium term investors were offering Dollar and Euro while demanding more Sterling and Kiwi. Kiwi seems to be the favored currency across horizons, while medium term investors bought more Dollar, Aussie and Swiss, as Euro, Loonie, Yen and Sterling were being sold.
OUR PICK – No New Pick
No new pick as we had three losses in a row. Another week of outflows for US equities markets (-$4.73 billion) and yet major indexes are rising this week. Foreign equities receive inflows of $3.46 billion while bonds continue to receive inflows at the rate of $2.33 billion a week. This week about -$1.41 billion was pulled out of the money market and all of these are telling us that markets are preparing for a risk averse period in our view. If the economy is not going as projected and inflation would rise as supply chain bottleneck increases due to covid delta spreads; Feds would not be in a position to taper and raise rate anytime soon.
Trades updates: We will continue to accumulate AUY as the stock now pays dividends yielding 2.65% at current price, we remain bullish T and will accumulate as dividends yields now at 7.44%, we remain bullish COG and will accumulate as dividends yields now at 2.74%, we remain bullish CLVS, VIPS while bearish GPRO, APA, and GE. ( Note : APA pays 0.55% while GE’s dividend yield is at 0.31% and CLVS, VIPS and GPRO currently does not pay any dividends)
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.