US: Exposure to US Equity markets 100% / Cash 0% (unchanged)
Europe: Exposure to European Equity markets 85% / Cash 15% (unchanged)
Last Friday trading session showed no "panic selling" led by Trump testing positive to Covid-19 but mostly another "flash rotation" in the wake of lingering optimism about the prospects for a US relief package after monthly data showed the improvement in the US labor market was loosing momentum, with 661,000 jobs added during the month, far fewer than in the previous months of the recovery. Meantime merger talks for spanish banks were driving the IBEX35 and the Stoxx600 higher.
Eventually, both the S&p500 (+1.5%) and the Stoxx600 (+2%) bounced back last week while Nasdaq and Techs also remained positive for the week (+0.9%) despite a 2.8% drop on Friday. All in all, markets are bumpy on a day to day basis, but remain overall positive despite the negative newsflow, while the volatility remain rather limited. European Utilities confirmed their strenghtening momentum (+4.2% last week) as well as Retail (+4%), while the Oil & Gas sector was once again the weak spot. The European Media sector is also strenghtening somewhat and is now in Minor Bullish Reversal, a positive for the sectoral participation while the Stoxx600 remain within its 3 months tiny trading range (780-820pts). Besides some "day-to-day noise" it is interesting to notice that major indices, while less directionnal, remain rather resilient coupled with limited volatility which confort the Phiadvisor's exposure of 100% Equity in the US and 85% in Europe (15% cash).
Our Market Pressure Index now stands at 39/100 (+1), into the "risk-on" zone (below 58).
The market participation/density is neutral/positive. There is 44% (+1) of major bullish configurations for the Stoxx600 and 55% (+1) for the S&P500, while major bearish trend configurations are 41% (-1) for the Stoxx600 and 31% (-1) for the S&P500. Therefore the density analysis reflects a neutral to positive momentum in Europe and in the US (spread now at +3 in Europe and +24 in the US). During risk-on/bullish market phases, the spread is expected to be > 30.