Stocks Lower As Bulls Take A Breather

STATE OF THE MARKETS

Stocks lower as bulls take a breather. US stocks closed lower on Thursday, with Dow (-0.54%), S&P (-0.64%), and Nasdaq (-0.64%), including Russell (-1.13%) all in the red, as players took profits ahead of Fed’s chair speech Friday to kick off the Jackson Hole symposium over the weekend. The Dollar Index closed above 93 handle as demand for Dollar returned after yields climbed higher to 1.38% for the 10Y benchmark.

In the commodities market, crude pulled back to $67.00/bl after short term traders booked profits for the weekend, while demand firmed as news hit the wire that oil companies are preparing for the severe storm expected to hit the gulf coast this weekend. Gold was on firm bid, but remained closed below $1,800/oz, as investors weighed the escalating crisis in Afghanistan and Fed’s tapering plan.

In the FX space, King Dollar seized the helm of demand in the short and long term accounts with Yen, as Aussie and Loonie were sent to the back burner. Sentiments in medium term accounts remain relatively unchanged as investors await the consumer sentiment report, ahead of Fed’s Powell speech at 10AM ET on Friday.

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OUR PICK – No New Pick

Humbled by markets. Another week of outflows from the US equities in the amount of $3.8 billions while inflows of $6.7 billion to the taxable bond funds and $317 million of inflows to foreign equities excluding $550 million to emerging markets. What we see here is a steady outflow of smart money unloading their equities and switching to bonds and foreign/emerging equities. The rumors are institutions are selling while hedge funds and retail are buying. What’s next is only time can tell.

Trades updates:  We are accumulating AUY as the stock now pays dividends yielding 2.80% at current price, we remain bullish T and will accumulate as dividends yields now at 7.70%, we remain bullish COG and will accumulate as dividends yields now at 2.99%, we remain bullish CLVS, VIPS and GT while bearish GE. (Note: GE’s dividend yield is at 0.31% and CLVS, VIPS and GT currently does not pay any dividends)

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