Tactical Europe Portfolio :
performance (alpha) : +2% versus Stoxx600NR
Megatrend Europe Portfolio :
performance (alpha) : -8.9% versus Stoxx600NR
Core US Portfolio :
performance (alpha) : -5.5% versus S&P500
Trading signal split (stocks only)
- Enter Long : 56.4% of stocks with an « enter long » signal in process
- Enter short : 0.5% of stocks with an « enter short » signal in process
- No signal: 43.0% of stocks of which last signal is an « Exit Long » or « Exit Short »
US: Exposure to US Equity markets 100% / Cash 0% (unchanged)
Europe: Exposure to European Equity markets 100% / Cash 0% (unchanged)
US indices closed mixed in yesterday trading session, with S&P500 falling despite stellar Big Banks results and the successfull Coinbase IPO as profit taking took place on the Technology sector with the Nasdaq down by 1% led by GAFAMs, Internet and Semiconductors sectors. WTI prices rose by c. 5%, the largest gain in a month, after weekly US data showed a surprisingly large drop in crude stockpiles likely due to weaker production from the Permian shale basin that once flooded the market. Therefore it was definitely a cyclical/Financial led trading session in the US. In Europe, there was a marked rebound in re-opening stocks that looks like the last "value" segment, as markets reassessed the J&J news, that could eventually have a minor impact on the vaccine rolling out as Pfizer is expected to increase deliveries dramatically, and as the J&J and Astra Zeneca vaccines should still be injected to people above 55, except in Denmark. The weak spot were defensive sectors in Europe, as the cyclical/value bounced back led by Basic Resources , Oil & Gas and Banks led by a weaker USD after inflation data calms tapering fears. There is currently no more clear driver in the markets, with almost all sectors and stocks in upward trend and alternance between themes on a daily basis. US 10 year rates remain stable near the 1.65% level, while the VIX remain at around 17 close to its lowest level since the beginning of the pandemic. The reopening stocks looks like the possible next trading opportunity to monitor, as it is still far from peak and showing relative strenght despite adverse conditions.
Our Market Pressure Index now stands at 35/100 (-1), still into the "bullish" zone.
The market participation/density is positive. There is 81% (=) of major bullish configurations for the Stoxx600 and 89% (=) for the S&P500, while major bearish trend configurations are 4% (=) for the Stoxx600 and 2% (=) for the S&P500. Therefore the density analysis reflects a positive momentum in Europe and in the US (spread now at +77 in Europe and +87 in the US). During risk-on/bullish market phases, the spread is expected to be > 30.
Buy Signal on Worldline (WLN-FR)
Worldline is a € 22.8 Bn market cap company, and one of the leading European providers of electronic payment and transactional services. Revenue is split between :
1/merchants and distributors (45% of revenues ), acquisition of payment orders, acceptance and management of online payments, sale and rental of payment terminals, sale of security modules for cryptographic purposes,
2/banks and financial institutions (33%) including issuance and management of credit and debit cards, acquisition and processing of electronic payment transactions, provision of online banking services,
3/businesses and government entities (22% of revenues) consists in provision of electronic ticketing services for public transport and rail companies, provision to authorities of solutions for automatic regulation of traffic and parking.
The company has proceeded to the buying out of Ingenico in 2020, and consequently will see its 2021 revenue almost double to €5.06 bn coupled with an EBIT margin that is expected to reach 20% at € 1 bn. EPS are expected to more than double to €1.73, then grow by 30% in 2022.
The newco Worldline will generate approximately €800M in free cash flow after taking the full unlocking of the estimated €250M in synergy benefits of the Ingenico acquisition.
Short term catalyst : Synergies of the Ingenico merger.