Monday
April  1		 Weekly market update
intro Despite fears about the global economic situation - strengthened by the inversion of the yield curve in the United States - this last week of the first quarter of 2019 ended with a positive balance sheet for the European and American financial markets. The latter have once again benefited from the accommodating speeches of central bankers, but also from the hopes for a trade agreement, after the resumption of negotiations between China and the United States.
Indexes

Over the past week, only the Asian markets have lost ground, such as the Nikkei, which is down by 1.95%. The Shanghai Composite and Hang Seng limit the damage thanks to Friday's session, and record weekly losses of 0.4% and 0.15% respectively.

In contrast, in the United States, the Dow Jones rose by 1.3%, the S&P500 by 0.9% and the Nasdaq100 by only 0.4%.

In Europe, the gains are comparable, with +1.2% for the CAC40 and Dax and +0.8% for Footsie, despite the uncertainties about Brexit. For the peripheral countries of the euro zone, Portugal gained 0.65%, Spain 0.35%, and Italy 0.95%.


French indice CAC40

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Commodities

As a customary critic of OPEC policy, Trump once again called on the cartel to increase production to stop an organized reduction in global supply. However, its criticisms did not shake crude oil prices, which rose by 1.6% over the week. The WTI is trading at around USD 60 per barrel.

The heavy fall in palladium prices is taking all the precious metals segment down. Palladium actually loses nearly 15% over the weekly sequence as a result of profit taking coupled with concerns about global demand. Gold and silver also lost ground to trade at USD 1290 and USD 15.07 per ounce respectively.

Base metal prices remained stable, as did copper and aluminum, which showed little change over the week at USD 6385 and USD 1896 per metric ton.
 
Equities markets

ADYEN: the Dutch unicorn

The young Dutch company is the AEX performer, with a 43% increase over 2019. Recently listed at EUR 240 (on June 13, 2018), the share price soared by 100% on the day of its initial public offering, before suffering the wave of market declines at the end of 2018. The title has since found a broad buyer consensus to reach a higher value.

Adyen is a company offering a platform for payments. The Amsterdam company is currently valued at more than 20 billion euros, making it one of the largest unicorns in Europe. The net revenue outlook for this year is an attractive asset (+38% in 2019) as well as the non-standard margin rates (40% net margin). Admittedly, the PERs remain astronomical, but this is the price to invest in a company whose major obsession with management is focused on the growth rate.

The reputation of its customers leaves no doubt about the quality of service: Netflix, Uber, BlaBlaCar, Ebay, among the 4500 customers, are helping to accelerate this expansion. The Dutch action is one of the components selected by the EUROPA ONE fund, eligible for the European Portfolio.

Adyen

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Bond market

Yields continue to fall on the interest rate markets. The situation stems from the central banks' desire to keep a Dovish tone to prevent any blockage in the economy. As a result, the Tbond fell back to 2.33%.

In Europe, the trend is duplicating itself, as is the case with the German Bund, which remains below the symbolic zero. The French OAT also posted a low yield of 0.30%. Italy benefits from this environment, with a reference at 2.48%, as does Spain, which pays interest on its debt at 1.08%.

In the limited circle of bonds with negative returns, the Swiss 10-year bond remains in first place, with a rate of -0.44% followed by the Japanese sovereign bond, with -0.1%.
Forex market

The interminable Brexit saga weighs on the British pound, the currency has dropped against a basket of major currencies, just like the greenback (-200 basis points to USD 1.31).

In Turkey, the Central Bank is trying to reassure the market after the fall of the Turkish lira (-5%) due to geopolitical problems (see graph).

The yen is being sought after in this climate of downward revisions to global growth, the Japanese currency is trading at JPY 124 against the euro and 110 against the dollar.

For its part, the European currency still produces graphical oscillations against the greenback (between 1.12 and USD 1.14) without any real directional direction. Despite a predominantly negative interest rate market, the Swiss franc remains strong against the rest of the major currencies, particularly the EUR/CHF exchange rate at 1.12.


The fall of the Turkish lira

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Economic data

The Ifo Business Climate Index for Germany rose compared to February (to 99.6). Last Wednesday, Mario Draghi said that the ECB was ready to postpone the next rate increase if necessary and to ease the cost of excess liquidity for financial institutions.

This week, the PMI indices, consumer and producer prices, the unemployment rate, and retail sales will be published.

In the United States, the statistics have, on the whole, been disappointing. GDP growth in Q4 2018 was revised downwards to 2.2% from 2.6% in the previous estimate. The real estate market slowed down (building permits, housing starts, Case Shiller index in decline). Consumer sentiment was also not very good (Conference Board and Chicago PMI index declines). Manufacturing activity declined in March (as evidenced by the Richmond Fed Index). Household spending and income also declined. The only good news is that unemployment benefit claims were lower than the previous week, the Michigan index and new home sales exceeded expectations.

This week, retail sales, ISM indices, durable goods orders and ADP job creation will be released. To close the weekly sequence, we will take note of the employment report (average hourly wage, unemployment rate and job creation).
A fast and furious quarter

The quarter ended with flattering scores on the various stock markets. Far from the stress of late 2018, the first three months of 2019 were marked by the return of investors to risky strategies. The latter took advantage of a break in the monetary normalization of central banks to intensify their interventions on equities that had depreciated sharply in index downgrades.

On the CAC40, more than 13% of gains were made in 2019, ranking the quarter among the top ten in the index's history, the record still belonging to the second quarter of 1988 (+29.9%).

After catching up on all the indices, the market is now at a crossroads, divided between the desire to prolong the rebound and fears of a global economic slowdown. Investors are therefore adopting an observer's stance, having the worst difficulties in analyzing the English saga, looking at European and Chinese macroeconomic statistics in parallel, while integrating the Dovish tone of central bankers.

In such a scenario, the search for quality securities, including good outperformance ratings on growth, on BNA revisions and on the financial situation, is a guarantee of success.