In our weekend digest, we summarize the best pieces published from the working week. These can be read in full by clicking on the link over the name/ticker.
Editor’s Picks – Finding May Options
The team run through their favourite stocks from both sides of the Atlantic as we hit spring. The picks include Netflix, which Phil thinks is an undervalued long-term buy following the slump post Q1 earnings.
Robert flags up Tron as his favourite pick for the month. Tron has been one of the few standout performers in the recent period of crypto volatility and general downward pressure on prices across the market. TRX is up nearly ~40% in the last month, in comparison to -10% for Bitcoin.
Phil ran through what his thoughts were for the FTSE 100, GBP and Gilts ahead of the Bank of England meeting on Thursday, and what the rate hike could mean for the rest of this year given the outlook.
Stocks – The Sell Off Intensifies
HCDI made a great move up from $2 after announcing expansion into Austin, Texas. The Austin portfolio includes single-family lots in communities like Summit Rock, Horseshoe Bay and Stone House, Horseshoe Bay, the real estate development company said.
This news helped move the stock up $1, a 50% move. After a few days of consolidation, the stock price looks set to break above $3. We think this move could extend to above $3.60, allowing for a further 20% gain.
Redbox Automated Retail is an American video rental company specialising in DVD, Blu-ray, 4K UHD rentals, and formerly video games via automated retail kiosks.
The stock does have a lot of short interest, reminiscent of AMC in January of 2021. RedBox seems to have a business model that is outdated, also similar to GameStop. So is this a short squeeze or is there something else driving this move?
FX & Commodities – USD Still Surging
The sharp bid in USD this week started at the end of last week. We wrote about this in the Week 4 edition, that can be read here. In short, US bond yields were rising, causing investors to buy dollars as a way of expressing the higher carry. Early this week, the move continued, pushing several pairs through significant trading levels.
For example, the break and hold below 1.3000 for GBPUSD opened up huge blue sky below. So as we passed through the week, momentum trading took over. Investors piled into this move, causing a far greater slump than would normally be seen.
We also flagged up the falling equity markets, with China growth concerns, Covid-19 lockdowns in Asia and the Ukraine war continuation. These factors also helped the greenback to retain the safe haven appeal for investors looking to move out of currencies like EUR.
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