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Stocks Slump Continues Amid Safe Haven Flows

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STATE OF THE MARKETS

Stocks slump continues amid safe haven flows. US stocks slump continues, with Dow (-0.43%), Nasdaq (-0.25%) and S&P (-0.46%) to Russell (-0.03%) all ended in red on Thursday, as investors weigh the impact of Fed’s uncertainty, delta variants and inflation challenges. In the meantime, more than $230 billion flowed into US bond futures of various maturities in a move to safe haven. The 10Y benchmark closed below 130 basis points while the 5Y closed below 80 basis points as the Dollar index retreated back below the 92.50 mark.

In the commodities market, crude was surprised with China’s plan to release the state oil reserves, which sent the black gold lower and settled around $68.15/bl as New York closed. Gold edged a tad bit higher, after three days of decline, settling around $1,794.70/oz as New York closed on the back of Dollar weakness.

In the FX space, safe haven flows were evident with Yen and Swiss advancing further in the demand territories across all horizons while Kiwi, Aussie and Loonie retreated to the back burner. Euro was slightly more on offer in the short and medium term accounts after the ECB decision to slow its asset purchase program in response to inflation that hit 3% in August – the highest in 10 years.


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G8 CURRENCIES SENTIMENTS

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

WALL ST MOST ACTIVE

TICKER LAST PRICE

% CHANGE

VOLUME 90 DAYS AVG
CEI 1.30 + 31.05 286,467.2K 25,779.2K
GEVO 7.94 + 37.13 184,485.6K 9,013.6K
GSAT 2.58 – 4.09 147,731.4K 34,798.5K
BBIG 10.82 + 5.87 122,709.4K 31,766.6K
SQQQ 7.35 + 0.96 90,938.9K 77,328.3K
AMC 48.52 + 2.36 85,960.9K 149,562.9K
ATER 10.18 + 10.53 74,833.2K 4,459.7K
ITUB 5.44 + 1.68 70,718.9K 36,648.3K
F 12.76 – 2.07 68,806.4K 72,682.2K
PBR 9.97 + 2.26 63,860.1K 31,804.6K
** % Change here refer to price

WALL ST TOP FLOWS

TICKER LAST PRICE

VOLUME

% CHANGE FUNDS FLOW $
TSLA 754.86 14,077.7K – 16.56 10,626.7M
MRNA 455.92 22,189.5K + 37.04 10,116.7M
AMZN 3,484.16 2,719.2K – 6.62 9,474.1M
AAPL 154.07 57,305.7K – 20.17 8,829.1M
MSFT 297.25 19,927.0K – 3.73 5,923.3M
NVDA 221.77 19,685.6K – 35.30 4,365.7M
AMC 48.52 85,960.9K – 8.74 4,170.8M
FB 378.00 9,098.9K – 12.69 3,439.4M
AMD 106.15 31,857.8K – 43.24 3,381.7M
LULU 420.71 7,789.5K + 565.42 3,277.1M
** % change here refers to volume

TOP 5 BLOCK ORDERS

SYMBOL PRICE / STRIKE TYPE VOL/OI FUNDS FLOW $
AMC 48.52 / 47.00 stock options/put 172.26 4,170.8M
GPS 24.60 / 26.00 stock options/call 64.14 201.2M
MRNA 455.92 / 460.00 stock options/call 52.92 10,116.6M
ZF/N/B – UB 123.1950 – 196.2700 US bond futures 17,140 238,809.7M
CL 67.33 – 69.75 crude oil futures 1,885 128.5M

OUR PICK – No New Pick.

No new pick going into the weekend. Another week of outflows from the US equities (-$3.1b) and money market (-$4.4b) into foreign equities ($367m) and taxable bonds ($6.0b). It seems that more funds are sitting ducks, waiting to be employed into commodities or snap some bargains in equities. The extended market valuations in equities make it harder to pick the right stocks, but reports show that corporate buybacks are the theme at this point. YTD, corporate buybacks are estimated at 60% y/y but still 10% below 2019 levels at this time. Have a wonderful weekend.

Trades updates:  

Equities: Currently we are holding 8 stocks – 7 longs and 1 short – and have approached maximum equities exposure. We are long AUY with dividends yielding 2.84%, T at 7.59% yields and COG yielding 2.37%. CLVS is currently 12% overvalued with -7.19 z-score but trading central projects a rebound towards 5.62-5.87 where we will most likely close our positions. We remain bullish with VIPS (33% undervalued with 5.59 z-score), GT (47% undervalued with 1.28 z-score) and CRON (16% undervalued with 9.18 z-score) while bearish GE (26% overvalued with 1.36 z-score).

FX & Commodities: Remaining trades of USD/CAD hit SL and we have re-entered short GBP/USD while Silver was closed at breakeven.

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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.