D&D Note (2.27.2018) ~ Interest Rates and FED Chair Powell Dominate Markets Today ~

D&D Note (2.27.2018) ~ Interest Rates and FED Chair Powell Dominate Markets Today ~

The big action today was FED Chair J. Powell’s testimony in front of Congress. One question in regard to the number of rate hikes and the answer of opening the door to a 4th rate hike this year led the algorithms to send the markets into selloff. The DOW fell 299 points on the day and the other major indices all finished down on the day over 1% with no sector finishing in the green.

Simply put as interest rates on the 10YR approach 3% the computers sell, when the yield falls to 2.8% the computers buy.

Chair Powell isn’t done speaking this week as he goes in front of the Senate on Thursday. Will he work back his comments or reiterate the same?

The dollar rose today on the back of the FED speak pushing oil prices down.

In the morning before the testimony D&D took profits in; AMZN, GOOG, APHQF, TWMJF, MO, FB. Cash is now our 6th largest position by weight.

Both APHQF and TWMJF are the portfolios biggest positions and because of the overweight nature we needed to reduce exposure even though the current price is lower than where we would have liked to reduce both positions.

Pot Stocks in general are testing their 200 day moving averages. D&D will be watching closely to see if there is a technical bounce off the 200 day to signal time to buy the basket again. Until then there could very well be a few more sessions of pain especially if the overall markets drift lower still this week on the back of FED/rates.

D&D still has a positive long term view on Canadian Pot Stocks. Although we are looking to take profits at key levels according to the cost basis of each holding.

Near and Longer Term Price Targets for profit taking:

IMLFF

– Near Target: $0.97

– Longer Target: $2.00

APHQF

– Near Target: $13.29

– Longer Target: $17.00

TWMJF

– Near Target: $25.06

– Longer Target: $28.59

EMHTF

– Near Target: $6.00

– Longer Target: $7.90

CNTTF

– Near Target: $7.85

– Longer Target: $10.00

Keep in mind our price targets are based on where we are priced into each of the above positions.

D&D movers:

– BA up 0.32%

– PYPL up 0.14%

– UNLRY (UNCH)

– EMHTF down -10.94%

– IMLFF down -10.61%

– CNTTF down -8.39%

– APHQF down -4.57%

Indexes

– DOW down -1.16%

– NASDAQ down -1.23%

– S&P down -1.27%

Sector Movers:

– No sector finished higher on the day

– Real Estate down -2.15%

– Consumer Discretionary down -2.12%

– Telecom down -1.84%

Notes

– US 2-YR 2.266% (up 0.036)

– US 10-YR 2.901% (up 0.042)

– US 30-YR 3.164% (up 0.01)

Volatility

– VIX 18.59 (up 17.66%)

Crypto (1:00 PST)

– BTC $10,660.01

– ETH $877.13

– BCH $1,241.58

– LTC $217.12

Metals

– Gold $1,319.00 down -1.04%

– Silver $16.425 down -1.19%

– Copper $3.15 down -1.49%

Energy

– Oil $62.81 down -1.72%

– Brent $66.36 down -1.69%

– Nat Gas $2.694 up 0.30%