Stocks Rout Continues As Feds Warned On Inflation

STATE OF THE MARKETS

Stocks rout continues as Feds warned on inflation. US stocks experienced another sell off on Tuesday, with  Dow (-1.36%), Nasdaq (-0.09%), and S&P (-0.87%) including Russel (-0.26%) all trending lower; after markets gapped down in reaction to St. Louis Fed’s Bullard warned of a higher inflation. More than $132 billion worth of block orders flowed into the Treasuries futures as the 10Y yields closed above 1.62% ahead of the inflation report on Wednesday.

Crude futures regained the $65.20/bl barrier, as concerns on supply shortage due the the cyber attack on US largest pipeline lingers. Traders also will be on the watch for EIA crude inventories that are expected to be reduced. Gold firmed above $1,830/oz as markets awaited inflation report, while Dollar advanced further in demand for the short-term.

Short term accounts were seen ditching the safe haven Swiss and the Comdolls, in anticipation of further demand for Dollar; while medium to long term accounts continue to bid Sterling, Loonie and Kiwi. Euro and Yen were also seen on bid, in a move to hedge against further Dollar weakness. Sell on news might be on the card post inflation reports.

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 – Pfizer Inc (PFE, NYSE)

Undervalued laggard, Accumulate. John Maynard Keynes’ quote that “market can remain irrational longer than you can remain solvent” is true, because markets move on emotional not mental logic. As we had expected back in late January, Pfizer did fall to $35.50 where we expect heavy bidding. Indeed, the stock fell below $34 before long term investors snapped the bargain for a good paying dividend. It’s interesting to note that the stock now is priced about the same it was eight quarters ago, yet the earnings ($0.93 vs $0.85) and dividends ($0.39 vs $0.36) have increased. PFE is a laggard with 0.52 annual beta, but if you are looking for a decent income stock (3.91% ADY), this one deserves to be accumulated, in our view.

To all Muslim traders and investors, we wish Eid Mubarak! and may profits always be with you.

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