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06/03/2017

Flash boursier

Key data

 USD/CHFEUR/CHFSMIEURO STOXX 50DAX 30CAC 40FTSE 100S&P 500NASDAQNIKKEIMSCI Emerging markets
Latest1.011.078'670.063'403.3912'027.364'995.137'374.262'383.125'870.7519'469.17931.07
Trend
 
 
 
 
 
 
 
 
 
 
 
%YTD-1.22%-0.15%5.48%3.43%4.76%2.73%3.24%6.44%9.06%1.86%7.98%

 

Highlights:

1° ECB under pressure
2° Possible Fed rate rise

Staying on course

Despite China’s downgrade to its growth forecasts, most Asian stockmarkets have chalked up strong performances following Janet Yellen’s latest remarks and in the wake of the declarations made at the National People’s Congress in China. This week will mark the turn of the ECB to meet and clarify the future direction of its monetary policy. And the recent rise in inflation is turning up the pressure for an end to the monetary stimulus.

Taking an unexpected presidential tone, Trump’s address before the joint sitting of Congress stoked the optimistic mood that had been driving financial markets. Despite persistent doubts, the Dow Jones was even able to spike to a new record. The animal instinct is not yet ready to be tamed…

Consequently, at her address in Chicago, the Fed chair left the door wide open for a rate rise at the next FOMC meeting on 15 March. Given the low starting point, higher borrowing rates would not cause concern in financial markets. However, it does raise the issue about unwinding the balance sheet. Judging by past statements, higher interest rates could encourage the Fed to start steadily closing out the positions that it has taken.

In 2016, the Eurozone economy grew by 1.7% – representing a five-year high – while inflation has surged above the ECB’s target. On Wednesday, Mario Draghi will try to soothe fears relating to a resurgence in inflation while trying to steer the current course. There are two main reasons why Europe’s central bankers are fearful of restricting monetary conditions. First, the recent inflation bounce is due chiefly to temporary factors and, secondly, the string of upcoming elections in Europe threaten the current fledgling recovery. Additionally, the ECB is worried about making the same mistake again by raising rates prematurely, as it did in 2008 and 2011.

SWISSQUOTE (ISIN: CH0010675863, price: CHF 24.50)

Full-year net profit was helped by easy comparison in that a CHF 25m provision had been set aside in 2015.

We note substantial net inflows of money, at CHF 4bn, in connection with its partnership with Postfinance. The number of new accounts opened rose by 30% while funds under administration were up 49%.

We like the group’s effective business model, slanted towards brokerage commissions, leveraged through a smart strategy of mass customer acquisition via both direct and indirect (i.e. partnership) channels.

We also like the group’s cautious dividend policy, thanks to which it leaves itself the funds to benefit from acquisition opportunities. The recommended dividend (yield 2.4%) will be paid at a rate of nearly 80% as a return of capital.

Buy with a target of CHF 30.

Palo Alto Networks (ISIN: US6974351057, price: USD 115.55)

Palo Alto Networks, a cyber-security firm, has reported results for its second quarter. Revenue rose by 26.3% to USD 422.6m, well below the consensus estimate of USD 429m.

The group’s outlook for 2017 is on the cautious side, with flat product revenue expected.

The disappointing results were pinned on sales execution issues arising from excessive territorial segmentation, which complicated marketing strategy. Operating expenses also increased.

The acquisition of Israeli firm LightCyber, which uses machine learning and behavioural analysis to detect IT threats, for USD 105bn in cash, and the USD 1bn share buyback are supportive to the share.

Buy with a target of USD 135.

 

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