Stocks Rebounded on Earnings Optimism

STATE OF THE MARKETS

Stocks rebounded on earnings optimism. US stocks rebounded on Wednesday, erasing earlier losses as earnings reports picked up. Dow (+0.93%), Nasdaq (+1.19%) and S&P (+0.93%) including Russel (+2.35%) advanced higher as more companies reported better than expected earnings. Breadth was generally bullish but volume was light as the US 10Y yields edged lower, below 1.56%, after bonds sell-off subsided.

Crude continues to be under selling pressure, closed below $61.35/bl, as covid resurgence in India hit the highest in one day, which further risking to dampen crude demand. On the other hand, gold continues its upward trajectory, approaching $1,800/oz as of this writing, after Feds re-affirmed its stand on keeping interest rate low for some time.

In the FX space, Loonie reversed earlier losses in the short term as BoC signaled a potential hike as early as next year, which sent King Dollar on the supply territories across the board. Risk sentiments seemed turned on as Swiss and Yen retreated in demand. Investors seemed to favor Kiwi over Aussie as Crude weakness might cap demand for Loonie. Euro and Pound continues to be in a tug of war as risk sentiments improves.

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

** % Change here refer to price

WALL ST TOP FLOWS

** % change here refers to volume

TOP 5 BLOCK ORDERS

OUR PICK – NIO (NIO, NYSE)

Gearing for Q1 earnings report. In mid March our plan to short NIO went better than expected as the stock broke below $37.50, where we expect to re-initiate our long. At this point, 50% retracement of all time low to all time high seemed respected. We saw quite some buyers are trapped in the $40-44.50 area where sellers seemed ready to re-initiate their shorts to drive price lower to the 61.8% retracement (circa $27). Given the earnings release next week (29/4) we rather long given current sentiments, and re-asses our positions afterwards. As of Q4, 2020 this stock is about 36% institutionally controlled and had a 2.1 million net purchased. Analysts consensus is a buy with 13% upside to fair value per S&P GMI.

Note: If you require fundamental reports for this stock, please contact your account manager or support@mfmsecurities.com for a copy.

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