Market phase: Overall bullish trend

US: Exposure to US Equity markets 100% / Cash 0% (unchanged)

Europe: Exposure to European Equity markets 100% / Cash 0% (unchanged)

Some profit taking emerged on high-flying overbought stocks and assets such as Tesla, renewables and cryptos, a move which in our view should not be seen so far as a lower appetite for risky assets but rather like an obvious consolidation after dramatic surges. The profit taking on both the US and European indices, were also coupled with a sell-off in US bonds with the 10Y rates now reaching 1.15% at a ten months high, with yield curve steepening because markets expects a big spending government However, higher rates are likely not so far an area of concern for equities right now, while the rising virus case remains the main concern short term as a third lockdown in Europe is not to be excluded, especially as the vaccination rate looks too slow to significantly impact the health situation in the coming weeks/months. As a result, segments linked to the Tourism industry such as Airlines and Hotels remains weak, while the "Stay at Home" theme including Cloud, Gaming, Medtechs and e-commerce is gaining momentum. The "quality growth" segment is also confirming progressively its short term bullish reversal, while some cyclicals (including Autos) are marking a pause. US broad indices are currently led by financials due to the yield curve steepening, while GAFAMs are loosing momentum and weighting negatively on the Nasdaq index but this is almost offset by the strong momentum in the semiconductors segment. Therefore, the strong momentum continues but sub-segments and themes looks more relevant than compartments such as "Value" or "Growth". This is another complex situation, wich implies more flexibility and full diversification.

Our Market Pressure Index now stands at 38/100 (+7), into the "bullish" zone.
The market participation/density is positive. There is 71% (+1) of major bullish configurations for the Stoxx600 and 79% (-1) for the S&P500, while major bearish trend configurations are 9% (+1) for the Stoxx600 and 4% (-1) for the S&P500. Therefore the density analysis reflects a positive momentum in Europe and in the US (spread now at +62 in Europe and +75 in the US). During risk-on/bullish market phases, the spread is expected to be > 30.