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It looks to be yet another day of choppy trading in European equity markets with little conviction on either side. At send time the FTSE had turned positive, while shares in Frankfurt and Paris were essentially flat. US markets were broadly weaker yesterday – the Nasdaq declined 2%, small cap Russell 2000 over 2.3%. The S&P 500 fell 0.55%, whilst the Dow was flat as financial and energy names fared better. Tesla fell 5% to $630 and the ARK innovation ETF declined almost 6% and is now around 27% below its recent peak. For both, anyone who has bought in since the start of December is nursing a loss. ARK’s Monte Carlo $3,000 ‘valuation’ for Tesla is not looking too clever. GameStop shares fell 30% after the earnings miss and signalled it will raise new capital. I think the reason for the decline was more about a lack of detail on the ecommerce transformation than raising cash – investors (traders) want it to raise money; they just want to know a lot more about what it plans to do with it.

Addressing US concerns, AstraZeneca revised the efficacy of its vaccine trials to 76% from 79%. Not a lot in that – hopefully it helps put doubts to bed, but of course it won’t. There has been a lot of huffing and puffing around the EU’s approach to vaccines – looking to curb exports, raiding a site in Italy to discover – shock, horror – vials of the AstraZeneca bound for…Belgium. Etc, etc. We can get down a rabbit hole of Brexit-y nationalism and counter-arguments. But what it amounts to Europe’s failure to secure enough jabs early enough and now turning that failure around and placing it on AstraZeneca and (how dare you be so much more efficient than the EU) countries that are doing vaccines rather well. Leaving aside how it makes the EU look to outsiders, for those within the bloc it makes the EU and more importantly for forthcoming German and French elections, the European Commission (by which we mean Ursula Von Der Leyen), the CDU in Germany and President Macron all look rather inept and rather petty. Meanwhile Frau Merkel has backtracked on a planned Easter lockdown. Mea culpa, she said, it was not possible. It does not suggest that the European centre is holding up terribly well and again raises fears about what will happen to Europe once Merkel goes. It also raises questions about how likely Marine Le Pen could give Macron a run for his sous next year.

Deliveroo is facing a bumpier road ahead of its IPO. Aviva and Aberdeen Standard won’t be taking part, citing concerns about riders’ rights, as well as the investment thesis. Growth has been exceptional – thank the pandemic – but it couldn’t serve up a profit despite last year’s 50% rise in revenues. It probably won’t be profitable for a while yet. Competition is pretty intense, particularly in the key London market. It hasn’t even reached Zone 9 yet out here in the sticks. Recent stock market debutant Trustpilot is offering clues. Yesterday shares fell below the IPO price; will Shu be sweating? I doubt it, but investors should always be careful about richly priced tech platform IPOs, particularly if they look like pricing at the top of the range because there is a lot of primary demand. That doesn’t leave a lot of headroom. Shares in Trustpilot rose by 14 per cent in its stock market debut on Tuesday. The company priced the IPO at 265p per share, giving it a market capitalisation of £1.1bn, and shares climbed as much as 16% from this level. But on Wednesday the stock was lower

DoorDash could be another useful case study, especially since it’s in the same game of delivering food at a loss. Shares in DoorDash closed at $189.51 on debut in December, 86 per cent above the IPO price, a sign of strong demand for shares. But the performance since has been weak: after hitting a high in February the stock currently trades about a third below its first day closing price at $125.

Cineworld shares fell 9% in early trade as it announced it would tap investors for more debt after a record $2.3bn loss. Despite plans to reopen in the US in April and over here in May, there are ongoing concerns about getting bums on seats. It has tapped investors for a $213m convertible bond maturing in 2025. Last November we noted that it had sufficient headroom for 2021 and beyond. However, it cautioned then that, in the event of a further delay to cinema reopening, whilst it the company has sufficient liquidity ‘for a number of additional months’, it ‘may require lender support in order to deploy that liquidity’. It seems that despite reopening in May, it won’t be back to normal quickly – lots of people are going to be fearful of enclosed spaces like cinemas. Shares remain among the most shorted in London, with around 5.6% out on loan.

Oil rallied strongly yesterday despite a surprise build in US crude inventories. OPEC+ oil producers at their April 1st meeting are likely to make similar decision to one month ago, extending production cuts of more than 7m bpd. Yesterday’s rally was significant but failure to recapture the previous day’s opening high on the daily candle indicates bears still have this. On the hourly chart on the left we can see the breakdown in the rally near-term but the $60 round number – which is also the 23.6% retracement of the bottom-to-top move since Nov – is offering support.

Oil rallied strongly yesterday despite a surprise build in US crude inventories.

In FX, the dollar remains on the front foot and sterling is pressured following the break below support at 1.3776, making new lows this morning with the focus on driving cable back to the 100-day SMA at 1.3610. (hourly on the left, daily on the right).

In FX, the dollar remains on the front foot and sterling is pressured.

EURUSD tests big support at 1.18 with a fresh 4-month low made this morning.

EURUSD tests big support at 1.18.

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