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Stocks Fall As Yields Spike

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STATE OF THE MARKETS

Stocks fall as yields spike. US stocks that made all time high earlier, fall back as Treasury yields spike, with the US10Y benchmark reached as high as 1.75% on Thursday. More than $690 billion flows into the US treasuries futures of various maturities as Dow (-0.46%), S&P500 (-1.48%) and Nasdaq (-3.02%) took a plunge. 

Crude plunged deeper in the red, to $60 from previous $64.60/bl on Dollar strength and as demand recovery was shattered by the new lockdowns imposed in certain part of Europe. Gold returned to under pressure as yields seeking investors ran to bond, settled the precious metal lower around $1,736.40/oz.

In the FX space, King Dollar regained the reign as it advanced further in the medium and long term accounts on the support of the safe-haven Swiss and Yen. Other than Loonie, the Comdolls was sent to the back burner across the board as fear of rising yields returned to the scene. Sterling continues to overbid Euro as the union currency lost bid across the board.


G8 CURRENCIES SENTIMENTS

ST USD JPY GBP CHF EUR CAD AUD NZD ST
MT CAD USD CHF JPY AUD GBP EUR NZD MT
LT CAD GBP USD AUD NZD EUR JPY CHF LT
** ST refers to Short-Term which is daily turnover, MT is Medium Term which is weekly 
and LT refers to Long-Term which is monthly turnover.

WALL ST MOST ACTIVE

TICKER LAST PRICE

% CHANGE

VOLUME 90 DAYS AVG
SNDL 1.46 – 5.19 421,371.8K 507,353.6K
JFIN 9.41 + 73.62 138,160.0K 330.2K
NEOS 1.18 + 1.72 122,280.9K 5,426.2K
AMC 14.00 + 3.24 122,212.3K 122,758.8K
AAPL 120.53 – 3.39 121,469.7K 108,033.6K
SPY 391.48 – 1.46 115,349.1K 74,092.7K
SQQQ 14.19 + 9.15 101,907.6K 76,380.2K
SOS 7.50 – 3.97 98,357.5K 37,679.7K
XLF 34.62 + 0.52 96,690.5K 58,721.2K
BAC 38.94 + 2.61 95,439.6K 54,439.7K
** % Change here refer to price

WALL ST TOP FLOWS

TICKER LAST PRICE

VOLUME

% CHANGE FUNDS FLOW $
TSLA 653.16 33,369.0K – 22.51 21,795.3M
AAPL 120.53 121,469.7K – 1.46 14,640.7M
AMZN 3,027.99 3,657.0K – 0.03 11,073.4M
MSFT 230.72 34,852.2K + 10.01 8,041.1M
BA 256.06 24,595.5K + 7.02 6,297.9M
FB 278.62 18,754.8K – 9.43 5,225.5M
AMD 78.12 51,036.5K + 14.80 3,987.0M
NVDA 508.90 7,354.7K – 25.52 3,742.8M
BAC 38.94 95,439.6K + 53.84 3,716.4M
BABA 236.43 14,836.0K – 6.13 3,507.7M
** % change here refers to volume

TOP 5 BLOCK ORDERS

SYMBOL PRICE/STRIKE TYPE VOL/OI FUNDS FLOW $
APA 19.24/22.50 stock options/call 126.34 182.5M
OXY 26.62/31.00 stock options/call 124.58 650.1M
GC 1,730.10 – 1,749.10 gold futures 400 69.4M
ZN/F/B 123.26 – 154.20 US bonds futures 53,575 693,703.2M
CL 59.35 – 63.15 crude oil futures 6,104 376.7M

OUR PICK – No new pick

No new pick going into weekend. We have observed increased Yen flows over these few days and expect Yen pairs completing their top, which signaled potential negative sentiments coming in due time. Rising yields is not of Feds immediate concerns at this point and ECB pledge to accelerate money supply to contain rising yields signaled that the central banks may let inflation run hot for a while before pushing the brake.

Rising yields will continue to drive more investors to bonds especially SNB and BoJ that are on negative yields. But 1 to 5 years yields spreads still favors CAD at this point in time, so USD strength as far as yields is concerned might still be limited, in our view.

Trades update: MO continues its upward trajectory despite equities sell-off, COG was stopped out at $18.40 after reached short-term TP1, USD/CHF remains active as it stays closed below 0.9280 but we may close going into weekend to reduce exposure, NIO sell limit @ 44.70 was filled late Wednesday and has reached short-term TP1, USD/JPY remains active as it closed below 109.00 and will ride the weekend. Have a good one!

HORIZON STRATEGY SL TP1 TP2
Short-Term
Medium-Term
Long-Term

 

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.