Market Overview

The following is a partial recap of the market analysis shared during today’s morning Discord call.

Today’s market is expected to open in the red, as perplexing news from the U.S.-China negotiations, in conjunction with rising oil prices, has inclined the market towards selling. It also doesn’t help that U.S. and European bond yields have increased, leading to concerns that inflation will continue to accumulate and contribute to market weakness. We believe that the morning play is to try to short something that opens flat.

S&P 500 Index

The American market sees more sales following concerns of inflation and uncertain news from the U.S.-China negotiations. A noteworthy event was China’s order of 200 jets from Boeing (BA), which was less than half of the expected 500. This has led to a 4% drop in Boeing shares. It’s worth noting that while the market is currently down, it’s likely to go back up again. We’ve seen a consistent pattern of dips being bought, with no reason to think that things will go differently this time.

Copper & Iron

Copper and iron have both seen significant drops of about 3.7% and 1.% respectively. While copper is still relatively strong, mining companies will feel the pressure, and it’s highly likely that we will see a correction in their share values. This can be an opportunity if you’re interested in this part of the metal space.

Left: copper price per ounce, right: Iron price per ounce

Local Stocks

British American Tobacco (BTI)

British American Tobacco has seen significant upward movement, pushing up to R1100. range in the U.S. This could be a good safety hedge, as it’s likely to trade relatively well in the morning.

Pick N Pay (PIK)

Pick’n Pay saw a massive jump yesterday, following headlines describing it as undervalued. We believe that the company’s upcoming earnings on Monday, 25th May, could be a catalyst for further movement.

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*Please note that these trade ideas form part of a larger weekly plan and the value of financial products can increase as well as decrease over time, depending on the value of the underlying securities and market conditions. The risk of loss arising from trading in Contracts for Difference can be substantial. You should carefully consider whether such investments are suitable for you in the light of your circumstances and financial resources.