ATOS has been removed from our Satellite Recommendations following a breakdown of trust after the statutory auditors issued a qualified opinion on the 2020 financial statements of two US entities. With management not looking very confident over the past few weeks, we thought it best to cut the position.
BAIDU has been added to our Asian Satellites with the b-Digital label. Baidu is the leading search engine in China. While advertising still accounts for the lion’s share of its revenue (70%), the group has boosted its long-term vision by investing in cloud computing and artificial intelligence, which will diversify its revenue streams.
L’ORÉAL (Core Holdings) is due to report Q1 2021 sales this Thursday showing one of, if not, the best organic sales growth performances in the sector (consensus: 7-8%), buoyed by a favourable base effect (vs. Q1 2020), strong momentum in Skin Care/Cosmetics and a revival in Professional Products (hair care).
TENCENT has been added to our Asian Satellites with the b-Digital label. The group has China’s largest user base, with major platforms in five key areas: communication, social media, gaming (in which it is the global leader), media and miscellaneous services. After Tencent coped fairly adroitly with a slew of regulations, we see the share as a buy opportunity at below $80.
Indices have been breaking one record after another, buoyed by plentiful liquidity and hopes of economic recovery as vaccination progresses. Results season kicks off this week, with US banks opening proceedings. On the macro front, we expect the ZEW indicator in Europe, retail sales in the US, and CPIs and industrial production in the US and the eurozone. We remain confident.
USD fell victim to profit-taking last week after a pause in the uptrend in US 10-year yields: EUR/USD 1.1882; USD/CHF 0.9260. With the Fed expecting the US economy to bounce back, we remain positive on USD. CHF has strengthened to EUR/CHF 1.1005 and continues to trade in the range 1.0960-1.11. Gold is trading at $1,739/oz. Our ranges – EUR/USD: supp. 1.18, res. 1.1950; USD/CHF: supp. 0.92, res. 0.9436; GBP/USD: supp. 1.3640, res. 1.3840.
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