STATE OF THE MARKETS
Yields fell as markets hedge. While US stocks closed in the green, with Dow (+0.30%), S&P (-0.34%) and Nasdaq (+0.01%) settled higher; yields on 2Y, 5Y and 10Y US bonds continue to drift lower as of this writing. The benchmark 10Y fell below 1.3% while the 5Y is below 0.78%, and 2Y to below 0.22% as markets hedged riskier assets on Wednesday.
In the commodities market, crude futures continue to drift lower for the second day, settling around $72.20/bl, as the OPEC+ drama saga between Saudi and UAE continues. On a different note, gold closed higher, above $1,803/oz, after FOMC minutes revealed a divided camp in Feds on rate hike.
In the FX space, risk-off tone exacerbated with more flows into Yen than Dollar with hedging seen in Kiwi. Loonie, Aussie and Euro were offered more across the board, while Sterling and Swiss remained relatively unchanged. Markets now await further data on unemployment claims on Thursday.
OUR PICK – Cabot Oil & Gas (COG, NYSE)
Still accumulating as the dividend increased. Our pick for COG back in March didn’t bode well for leveraged traders as it hit our stop loss but worked well for cash accounts without stop loss as the stock increased its dividend payout from 10 cents to 11 cents a share giving a trailing 12 months yield of 2.41%. Given the fact that COG also bought back its shares in 2020, yielding 2.66%, that’s a 5.12% yield for last year. Not bad, but the best was when COG bought back its shares in 2019 at 9.22% yields, as crude prices collapsed, for a total yield (including dividends) of 11.23% for that year! Fairly valued at $23 by Morning Star. Income investors and annuities love this stock, and so do we.
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.