Tactical Europe Portfolio :
performance (alpha) : +10.9% versus Stoxx600NR
Megatrend Europe Portfolio :
performance (alpha) : +21.9% versus Stoxx600NR
Core US Portfolio :
performance (alpha) : +18.5% versus S&P500
Trading signal split (stocks only)
- Enter Long : 42.2% of stocks with an « enter long » signal in process
- Enter short : 3.0% of stocks with an « enter short » signal in process
- No signal: 54.9% of stocks of which last signal is an « Exit Long » or « Exit Short »
US: Exposure to US Equity markets 85% / Cash 15% (unchanged)
Europe: Exposure to European Equity markets 85% / Cash 15% (unchanged)
M&A activity looks to trigger a rebound in tech stocks on Monday after another negative week on the Nasdaq100 (-4.6%) led by GAFAM and Semiconductors.
Nvdia offers $40bn to acquire Arm, a top supplier of designs and intellectual property to most of the global semiconductor industry, while Oracle has been choosen to take over Tik Tok according to the press and Gilead will pay $21 bn to buy Biotech Immunomedics Inc. and its breast-cancer drug. The M&A rush could be a support for Tech stocks short term, in a sign big Tech should use their huge market cap to trigger opportunities, but this may be not enough to resume the strong momentum, given the short term correction in progress led by demanding valuation and rotation towards cyclicals.
AstraZeneca confirmed this weekend it has resumed British clinical trials of its COVID-19 vaccine, one of the most advanced in development, after getting the green light from safety watchdogs. This is a positive for " back to work" stocks , that remained linked to the outbreak situation and progress in new vaccine/treatments. Therefore overall good news, on all fronts but the correction in process on the Technology segment is still alive.
Our Market Pressure Index now stands at 56/100 (-6), into the "risk-on" zone (below 58).
The market participation/density is neutral/positive. There is 43% (=) of major bullish configurations for the Stoxx600 and 50% (=) for the S&P500, while major bearish trend configurations are 34% (=) for the Stoxx600 and 30% (=) for the S&P500. Therefore the density analysis reflects a neutral to positive momentum in Europe and in the US (spread now at +9 in Europe and +20 in the US). During risk-on/bullish market phases, the spread is expected to be > 30.
Buy Signal on Twitter (TWTR-US)
Twitter is a $31.8 bn market cap and a famous social network, that specializes in the development and management of a microblogging tool allowing its users to post and send free short messages (called tweets) on the Internet, via instant messaging and SMS. Net sales break down in two main segments : sales of advertising space (87% of sales) and sales of licenses (13%).Sales derived from United States (56%), Japan (16%) and others (28%).
The company generates cash-flows and is expected to grow again in 2021 (revenue of $4bn), but heavily depending on advertising. Twitter is a Mid cap company with a lot of cash (over $5bn) in its balance sheet, allowing plenty of flexibility to improve its growth potential. One of the main point is that user growth soared during the Covid crisis that should translate into growth potential later on.
Short term catalyst: Growth rate, cash-flow generation .
This signal looks consistent with the strong momentum on the US Technology segment.