ELI LILLY (US Core Holdings) has released results from its trial of donanemab in Alzheimer’s disease. The data is very promising, with treatment slowing disease-related decline by 32% (primary endpoint). Three out of four secondary endpoints were missed but still showed a positive trend. Consequently, a second, more extensive trial will be needed to secure approval (2023-2024), though the consistency of the observed response increases the likelihood of its success. Buy on weakness.
ORACLE (US Core Holdings) has reported results in line with expectations for Q3 of its FY 2021. The share price has fallen 5% on disappointing guidance and slowing cloud growth over the past few quarters. The company has announced a $20bn share buyback programme.
According to Reuters, VOLKSWAGEN (Satellites) is considering axing up to 4,000 jobs (5% of its workforce) at its German plants: the CEO’s cost-cutting strategy, which recently won the support of the Board, is taking shape.
ZALANDO (Satellites) will this Tuesday report Q4 2020 results showing strong growth (with sales up at least 36%), boosted by fresh COVID restrictions. While Q1 2021 is set to continue in a similar vein, management’s full-year guidance will remain cautious due to the difficulty of assessing the impact of store reopenings and a very high base effect in H1 2020.
With Biden’s stimulus on the one hand and inflationary fears on the other, investors are likely to once again be caught between two stools this week. We will be listening closely to Jay Powell’s comments on Wednesday to see whether he can reassure markets that inflation is under control. In the meantime, sector rotation is likely to continue and our focus will be on US 10-year yields.
With EUR/USD failing to break through resistance at 1.20, the pair (1.1932) once again looks set to test support at 1.1840. Investors will be closely following the Fed’s comments (16-17 March). EUR/CHF is consolidating at around 1.1090. GBP is stable at GBP/USD 1.3927 and EUR/GBP 0.8560. Our ranges – USD/CHF: supp. 0.92, res. 0.94; GBP/USD: supp. 1.3860, res. 1.40; EUR/CHF: supp. 1.10, res. 1.12.
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