Weekly Technical Review

Capital Union Bank Research Team

[email protected]

February 2, 2021

Asset Classes – Performance per Year

February 2, 2021

2

Global Equities MSCI World 0.4% 16.5% 28.4% -8.2% 23.1% 8.2% -0.3% 5.6% 27.4% 16.6% -5.0% 12.4% 30.9% -40.3% 9.7%

MSCI ACWI 1.1% 16.9% 27.3% -8.9% 24.7% 8.5% -1.8% 4.8% 23.5% 16.8% -6.8% 13.3% 35.5% -41.8% 12.3% EuroStoxx 50 1.0% -2.6% 29.4% -11.3% 9.9% 4.8% 7.3% 4.9% 22.7% 19.6% -13.1% -1.8% 27.0% -41.8% 10.4% Stoxx 600 1.5% -1.4% 27.9% -10.1% 11.4% 2.6% 10.2% 7.8% 21.5% 18.9% -8.0% 12.3% 33.4% -43.4% 2.9% FTSE 100 0.7% -11.4% 17.2% -8.8% 12.0% 19.2% -1.4% 0.7% 18.7% 10.0% -2.1% 12.7% 27.4% -28.3% 7.4% SMI 0.8% 4.3% 30.2% -7.0% 17.9% -3.4% 1.1% 12.9% 23.9% 19.1% -4.6% 1.2% 22.1% -33.0% -1.4% Topix 2.4% 7.4% 18.1% -16.0% 22.2% 0.3% 12.1% 10.3% 54.4% 20.9% -17.0% 1.0% 7.6% -40.6% -11.0%

Emergings MSCI China 10.6% 29.0% 23.0% -18.7% 55.6% 1.2% -7.7% 8.3% 4.0% 22.9% -18.3% 5.1% 62.7% -51.1% 66.6%

Bovespa -1.3% 2.9% 31.6% 15.0% 26.9% 38.9% -13.3% -2.9% -15.5% 7.4% -18.1% 1.0% 82.7% -41.2% 43.6%

MSCI Emerging Markets 5.4% 18.7% 18.8% -14.3% 37.8% 11.8% -14.6% -2.0% -2.3% 18.6% -18.2% 19.2% 78.9% -53.2% 39.7%

Bonds Euro Aggregate Bond Index -0.4% 4.0% 6.0% 0.4% 0.7% 3.3% 1.0% 11.1% 2.2% 11.2% 3.2% 2.2% 6.9% 6.2% 1.4%

Euro 1-3Y Bond Index 0.0% 0.2% 0.4% -0.2% -0.1% 0.6% 0.6% 1.8% 2.0% 5.0% 2.3% 1.7% 5.8% 5.8% 3.6%

US Aggregate Bond Index -0.7% 7.5% 8.7% 0.0% 3.5% 2.6% 0.5% 6.0% -2.0% 4.2% 7.8% 6.5% 5.9% 5.2% 7.0%

US 1-3Y Bond Index 0.1% 3.1% 4.0% 1.6% 0.9% 1.3% 0.7% 0.8% 0.6% 1.3% 1.7% 2.6% 5.0% 4.6% 6.7%

US High Yield 0.4% 7.1% 14.3% -2.1% 7.5% 17.1% -4.5% 2.5% 7.4% 15.8% 5.0% 15.1% 58.2% -26.2% 1.9%

Commodities CRB Index 5.6% -9.7% 9.4% -12.4% 0.7% 9.3% -23.4% -17.9% -5.0% -3.4% -8.3% 17.4% 23.5% -36.0% 16.7%

Gold -2.6% 25.1% 18.3% -1.6% 13.5% 8.1% -10.4% -1.4% -28.3% 7.1% 10.1% 29.6% 24.4% 5.8% 30.9%

WTI Crude Oil 10.4% -20.5% 34.5% -24.8% 12.5% 45.0% -30.5% -45.9% 7.2% -7.1% 8.2% 15.1% 77.9% -53.5% 57.2%

Dollar Index 1.1% -6.7% 0.2% 4.4% -9.9% 3.6% 9.3% 12.8% 0.3% -0.5% 1.5% 1.5% -4.2% 6.0% -8.3%

The Dollar Index - Daily

February 2, 2021

3

The

Dollar Index broke out of its downward pennant and we continue to expect a rebound to 92 as a first

The Dollar Index - Monthly

February 2, 2021

4

On a long term picture, the Dollar Index is rebounding on a major support level with a nice bullish reversing

pattern on a monthly close.

The EUR/USD - Daily

February 2, 2021

5

The

Euro failed to hold on its 50D MA and is breaking an important support level as investors continue to

Citigroup EUR Positioning Index

February 2, 2021

6

Bitcoin

February 2, 2021

7

Bitcoin remains robust amid intense retail speculation and some support by Elon Musk. We continue to expect

a pullback to the $22’000-$’25’000 range as long as the downward pennant is not broken on the upside

($35’000resistance).

Cryptocurrencies

February 2, 2021

8

S&P Futures - Daily

February 2, 2021

9

The

S&P 500 is back in its trading range. The relative steadiness of markets masks some sector and style

rotations and some divergences between momentum and price action point to a further pickup in volatility,

likely on the downside.

S&P Futures - Monthly

February 2, 2021

10

The monthly chart shows the wide range of the

S&P 500 with a rejection of the resistance at the end of the

month.

Implied Volatility

February 2, 2021

11

Nasdaq 100 - Daily

February 2, 2021

12

The

Nasdaq remains in its trading range ahead of the last few two quarterly publications: Alphabet and

FAANGs - Daily

February 2, 2021

13

For the moment,

FAANGs have failed to break out to a new high after last week’s publications (Microsoft,

Apple, Tesla, Facebook, Visa,…).

February 2, 2021

14

Large Tech stocks

The table shows the distance of a

number of tech indices and large

tech and media stocks to their

moving average (expressed as a

potential downside).

Most of the large Tech stocks

remains well above their long

term trend with some significant

downside risk.

Market Cap in $Bn

50D

100D

200D

S&P 500 Information Technology

$

9'165

-4%

-8%

-14%

Apple Inc

$

2'252

-5%

-9%

-20%

Microsoft Corp

$

1'807

-9%

-10%

-14%

Amazon.com Inc

$

1'677

-5%

-5%

-10%

Alphabet Inc

$

1'283

-6%

-12%

-17%

Tesla Inc

$

796

-17%

-33%

-52%

Facebook Inc

$

746

4%

3%

-3%

Visa Inc

$

438

5%

3%

0%

NVIDIA Corp

$

328

0%

0%

-13%

Mastercard Inc

$

320

5%

4%

-1%

PayPal Holdings Inc

$

283

-6%

-13%

-22%

Netflix Inc

$

239

-4%

-6%

-10%

Adobe Inc

$

225

2%

2%

-4%

salesforce.com Inc

$

210

0%

5%

-6%

ASML Holding NV

$

193

-12%

-21%

-27%

Accenture PLC

$

164

2%

-2%

-9%

SAP SE

$

133

-5%

3%

9%

Zoom Video Communications Inc

$

111

2%

13%

-13%

ServiceNow Inc

$

109

-5%

-8%

-18%

US Banks - Daily

February 2, 2021

15

US Banks fell further amid worries of a slow economic recovery, showing that large segments of the US market

havelost their momentum.

US Energy - Daily

February 2, 2021

16

Russell 2000 - Daily

February 2, 2021

17

US Small Caps are back in the range though performance continues to be distorted by the high volatility on a

few stocks heavily traded by retail investors.

EuroStoxx 50 - Daily

February 2, 2021

18

Style rotation in Europe

February 2, 2021

19

Once again the market experiences some shifts in style rotation with a drop of value stocks and a rebound of

cyclicals.

MSCI China – Weekly

February 2, 2021

20

China’s economy is outperforming the rest of the world during the pandemic and Chinese stocks are still in

breakout mode though we expect some profit taking ahead of the Lunar New Year Holiday as the domestic

market will be closed from February 11

th

_{to Wednesday 17}

th

_.

MSCI Emerging – Weekly

February 2, 2021

21

2000

2200

2400

2600

2800

3000

3200

3400

3600

3800

4000

-5

-4

-3

-2

-1

0

1

2

Se

p-18

Oc

t-18

Nov

-1

8

Dec

-1

8

Jan

-1

9

Fe

b-19

M

ar

-1

9

Ap

r-1

9

M

ay

-1

9

Ju

n-19

Ju

l-1

9

Au

g-1

9

Se

p-19

Oc

t-19

Nov

-1

9

Dec

-1

9

Jan

-2

0

Fe

b-20

M

ar

-2

0

Ap

r-2

0

M

ay

-2

0

Ju

n-20

Ju

l-2

0

Au

g-2

0

Se

p-20

Oc

t-20

Nov

-2

0

Dec

-2

0

Jan

-2

1

Risk Appetite Index

S&P 500

Risk Appetite

February 2, 2021

22

Our

Risk Appetite Index is back to neutral mode amid worries about the recovery and uncertainties created by

The US Long Bond

February 2, 2021

23

The

US Long bond remains on its support level. This level is very important as a drop below 169-167 would be

US High Yield

February 2, 2021

24

US High Yield have ticked up but still do not reflect the decreasing quality of issuers, the upcoming boom of

bankruptcies in 2021 and the risks facing the economic recovery.

Be cautious

Gold – Daily

February 2, 2021

25

Gold – Monthly

February 2, 2021

26

On a long term picture,

Gold is coming from a nearly 10 years correction and has the potential to make a $900

breakout in the coming months with a $2’750 to $3’000 target.

Silver – Daily

February 2, 2021

27

Silver has been caught in retail speculation as well and briefly reached $30 before retreating. It should return

to $25 when the retail horde moves out to pump up the price of yet another asset with an intermediate

support around the current level of $27.6

Crude Oil

February 2, 2021

28

WTI Crude Oil is testing its resistance line. Long term, we believe that structural imbalances between supply

and demand will support prices.

CRB Commodity Index

February 2, 2021

29

The

CRB index is once again attempting a break out. It should pause for now as the index is overbought but it

Contacts

Capital Union Bank Ltd.

CUB Financial Center, Lyford Cay

P.O. Box AP 59223

Nassau, Bahamas

capitalunionbank.com

[email protected]

30

February 2, 2021

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February 2, 2021