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Stocks Mixed As Investors Cashing Out

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STATE OF THE MARKETS

Stocks mixed as investors cashing out. US stocks closed mixed on Monday, with Dow (+0.30%) piercing new high while Nasdaq (-0.60%), and S&P500 (-0.09%) edged lower, as long term leveraged funds were seen unloading more shares on profit taking, after Archegos forced liquidation on Friday. Investors were seen to run for more cash than bonds or gold, forcing the yellow metal to close lower while yields edged higher. Yield on 30Y bonds was seen to hit 2.41%, its highest since November 2019.

Crude climbed higher, above $61.50/bl, after OPEC+ was reported to rollover its production quota until the next meeting. The Suez Canal incident has been resolved, but demand concerns in Europe and South Asia still plague the markets. On the other hand, gold was under selling pressure as flight to cash drove the Greenback higher. The yellow metal closed below $1,720/oz mark and still trending lower as of this writing.

King Dollar continue to reign in the short and medium term, albeit a retreat to Loonie in the long term, as month and quarter end is around the corner. As the short-week will see US employment figure this Friday, FX sentiments suggest that markets are in a wait and see attitude and remain cautious.


G8 CURRENCIES SENTIMENTS

ST NZD CHF AUD USD JPY CAD GBP EUR ST
MT USD CAD AUD GBP NZD JPY EUR CHF MT
LT CAD USD AUD GBP EUR JPY CHF NZD 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
SEAC 2.08 + 101.94 386,097.5K 1,378.3K
TME 20.34 + 1.19 241,309.8K 18,733.7K
VIAC 45.01 – 6.68 213,578.9K 20,011.0K
SNDL 1.12 – 0.89 140,076.9K 499,498.0K
HOFV 6.75 + 31.07 125,896.5K 14,639.2K
IQ 16.55 – 5.05 137,934.7K 13,593.2K
SPY 395.78 – 0.05 108,107.6K 75,392.4K
SQQQ 13.55 + 0.15 93,876.6K 77,870.5K
HGEN 21.61 + 54.47 89,090.2K 991.4K
NIO 35.51 – 1.72 83,188.2K 132,675.1K
** % Change here refer to price

WALL ST TOP FLOWS

TICKER LAST PRICE

VOLUME

% CHANGE FUNDS FLOW $
TSLA 611.29 28,636.9K – 32.04 17,505.5M
BIDU 204.70 58,823.4K + 195.20 12,041.2M
AAPL 121.39 80,819.2K – 30.64 9,810.6M
VIAC 45.01 213,578.9K + 336.32 9,613.2M
AMZN 3,075.73 2,745.9K – 21.59 8,445.6M
FB 290.82 21,718.8K – 0.90 6,316.3M
MSFT 235.24 25,227.4K – 20.07 5,934.5M
BA 250.52 22,198.7K – 6.17 5,561.2M
TME 20.34 241,309.8K + 348.26 4,908.2M
BABA 231.86 18,029.1K + 9.33 4,180.2M
** % change here refers to volume

TOP 5 BLOCK ORDERS

SYMBOL PRICE/STRIKE TYPE VOL/OI FUNDS FLOW $
CCJ 16.50/35.00 stock options/call 59.00 115.1M
RY 129.16 FX futures/EURJPY 1,955 229.8M
GC 1,708.80 – 1,713.60 gold futures 300 51.3M
ZF 123.2800 US bond futures 4,600 56,708.8M
CL 58.67 – 61.50 crude oil futures 1,350 82.0M

OUR PICK – USD/CAD

Yields still favor CAD. Though investors are making a big deal of the USD yields, truth is, USD yields spreads only beat CAD on a 7 year note (1.32% vs 0.95%). 1, 2, 3, and 5 years note still favors CAD by some good margins, even on the shorter 1, 3, and 6 months note. (Refer to the matrix below)

So obviously the rise of USD/CAD exchange rate for the past two weeks has been mostly on short covering and flight to safety, we believe. Subsequently when the markets calmed, USD will lose bid to CAD, and the exchange rate normalized, albeit the monthly low, might has formed the base for USD, given current sentiments in the equities market in our view. Month and quarter end might also see some USD sales for rebalancing, so we favor sell stop @ 1.2570 for the short and medium term, while buy for the long term.

HORIZON STRATEGY SL TP1 TP2
Short-Term Sell Stop @ 1.2570 1.2620 1.2520 1.2470
Medium-Term Sell Stop @ 1.2570 1.2620 1.2470 1.2420
Long-Term Buy

 

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.