By Abdul H. Jaffar 
STATE OF THE MARKETS
Stocks dropped on strong jobs data. US stocks erased earlier gains after news of strong jobs data. ADP employment report showed private employment rose significantly more than expected (235k vs. 150k), sending signals that the Federal Reserve may have to raise rates higher for longer. The tech-laden Nasdaq (-1.47%) fell the most, followed by S&P (-1.16%), Russell (-1.09%) and Dow (-1.02%) as flows to bonds receded, sending yields higher. The shorter 2Y jumped to 4.49% while the 10Y benchmark hit 3.77% as the Dollar index spiked past the 105.20 barrier.
In the commodity markets, demand concerns and Dollar strength pulled crude oil lower to $72.60/bl before bidder emerged to settle the black gold higher around $74.05/bl as New York closed. Speculation on longer and higher rates from the Federal Reserve put gold under pressure as the metal closed lower around $1,832.60/oz. Elsewhere, iron ore stalled around the $115/tn handle waiting for the next catalysts.
In the FX space, short and medium term sentiments were bullish as the Swiss pulled back in demand, while Aussie, Dollar and Loonie advanced into the demand territories. Sterling remained under pressure while Euro was in limbo across the board.
On Friday, all eyes will be on the non-farm payroll reports as any significant jobs drop and higher unemployment may fuel equities rally. Shall the opposite happen, we might see a stronger Dollar as markets speculate on a more aggressive Federal Reserves. Earnings releases to watch include Greenbrier (GBX).
G8 CURRENCIES SENTIMENTS
| ST | USD | CAD | EUR | CHF | NZD | GBP | AUD | JPY | ST |
| MT | AUD | CAD | USD | JPY | EUR | CHF | GBP | NZD | MT |
| LT | JPY | EUR | CHF | AUD | USD | NZD | CAD | GBP | 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 |
| TQQQ | 16.36 | – 4.72 | 179,723.3K | 217,413.9K |
| TSLA | 110.34 | – 2.90 | 157,986.3K | 94,231.2K |
| SQQQ | 56.93 | + 4.63 | 100,814.5K | 134,239.7K |
| BBD | 2.73 | + 5.96 | 99,616.0K | 38,219.8K |
| SOXL | 9.57 | – 4.97 | 82,896.6K | 114,008.4K |
| AAPL | 125.02 | – 1.06 | 80,962.7K | 87,523.4K |
| SPY | 379.38 | – 1.14 | 76,570.8K | 88,940.6K |
| AMZN | 83.12 | – 2.37 | 67,930.8K | 73,446.1K |
| BLPH | 2.29 | + 150.33 | 59,050.2K | 21,518.8K |
| F | 12.25 | + 2.00 | 50,780.2K | 61,545.6K |
** % Change here refers to price vs previous day price
WALL ST TOP FLOWS
| TICKER | LAST PRICE |
VOLUME |
% CHANGE | FUNDS FLOW $ |
| TSLA | 110.34 | 157,986.3K | – 0.48 | 17,432.2M |
| AAPL | 125.02 | 80,962.7K | – 4.05 | 10,121.9M |
| MSFT | 222.31 | 39,585.6K | + 28.98 | 8,800.3M |
| AMZN | 83.12 | 67,930.7K | – 7.87 | 5,646.4M |
| NVDA | 142.65 | 38,916.8K | – 9.71 | 5,551.5M |
| META | 126.94 | 25,447.1K | – 13.84 | 3,230.3M |
| BABA | 104.58 | 30,400.3K | + 39.73 | 3,179.3M |
| AMD | 62.33 | 46,159.5K | – 12.41 | 2,877.1M |
| UNH | 489.96 | 5,497.1K | + 94.18 | 2,693.4M |
| NFLX | 309.70 | 8,328.3K | – 4.57 | 2,579.3M |
** % change here refers to volume vs. 20 days average volume.
TOP 5 BLOCK ORDERS
| TICKER | PRICE | TYPE | VOL/OI | FUNDS FLOW |
| IQ | 6.86 | stock/options | 370.83 | 210.4M |
| WB | 19.95 | stock/options | 168.75 | 58.6M |
| FANG | 134.04 | stocks/options | 113.64 | 320.7M |
| NQ | 10,820.25 | NASDAQ futures | 689,521 | 7,460.8M |
| ES | 3,829.00 | S&P futures | 1,636,427 | 6,265.9M |
OUR PICK – No New Picks
No new picks going into the weekend. After two weeks of small inflows into the US equities, this week reported outflows (-$5.1 billion) alongside the taxable bond funds (-$2.1 billion), while heavy flows into the short term money markets (+$57.8 billion). It seems that investors are convinced that the Federal Reserve is going to raise rates higher for longer and the employment data on Friday will set the tone for the short and medium terms.
Trades updates:
Equities: While WBA (12% undervalued, 5.12% yields) dropped on declining sales, SQ (about 10% overvalued with 3.88 z-score) and CRON (31% undervalued with 19.32 z-score) were on firm footing this week. M (42% undervalued, 2.92% yields), VIPS (35% undervalued with 3.93 z-score) ), T (about fairly valued, 5.78% yields) and AUY (11% undervalued, 2.06% yields) continue to climb higher this week.
FX & Commodities: Crude oil reached TP1 for the second time before stopping out and we remained bearish NZD/USD.
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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.