STATE OF THE MARKETS
Stocks up with mixed breadth. US stocks were on the up move Thursday but with mixed breadth as investors shrugged off the hotter than expected inflation numbers. Capital outflows were noted as Dow (+0.06%), Nasdaq (+0.78%) and S&P (+0.47%), except Russell (-0.68%) edged higher when New York closed. Demand for bond safety continues to increase, sending the 10Y benchmark below 1.50% for the first time in 14 weeks.
Crude futures were on firm bids, above the $70/bl mark, as investors confidence that Iran’s new supplies will not offset strong demand by much. The anti-inflationary asset gold, bode well on inflation increase as it remains firm above $1,880/oz after Dollar (DXY) took a plunge back below the 90 mark.
King Dollar suffered a setback as the US senate approved a $547 billion infrastructure spending bill while Aussie and Sterling returned to the demand territories. Investors seemed cautious as safe haven Yen was more in demand, with Swiss. Loonie bulls were seen on offers across the board as traders and investors took profits off the table. Short and medium term accounts were seen to be buying Kiwi and selling Euro.
G8 CURRENCIES SENTIMENTS
** ST refers to Short-Term daily turnover, MT is Medium Term weekly
and LT refers to Long-Term monthly turnover.
WALL ST MOST ACTIVE
|VOLUME||90 DAYS AVG|
** % Change here refer to price
WALL ST TOP FLOWS
|% CHANGE||FUNDS FLOW $|
** % change here refers to volume
TOP 5 BLOCK ORDERS
|SYMBOL||PRICE / STRIKE||TYPE||VOL/OI||FUNDS FLOW $|
|LAZR||23.62 / 35.00||stock options/put||55.98||83.9M|
|VRAY||5.76 / 6.00||stock options/call||54.99||14.9M|
|ZN||132.2450||US bond futures||3,665||48,467.8M|
|CL||68.35 – 70.20||crude oil futures||1,749||121.1M|
OUR PICK – No New Pick
No new picks going into the weekend. It seems that investors are buying the idea that inflations are transient as they flocked to bonds at current rates. At least for now. Here are the facts. Over the past three months, monthly core CPI has increased 2.0% – the most since July 1982. Annually it has increased 3.8% – the most since June 1992. Since core CPI excludes foods and energy, it does say much about the cost of goods and services in general. Obviously it has now surpassed the Fed’s 2% target and if not contained, it may result in markets losing faith if rates continue to stay low. At this point, the only US bond maturity that yields more than 2% is the 30Y (2.14%), which is an awfully long time for some investors. We’ll see what Feds has to say next week.
Trades updates: We still look to close MO around $48.50, we remain bullish AUY and will re-entry if stopped, we may close AUD/USD and EUR/USD for now and re-enter on better fills next week, we remain bullish T and bearish AUD/NZD as short-term USD/JPY long was filled.
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