Key Points:
Global:
The majority of 47 markets are back in an Uptrend as of last week. First shift in six weeks. Still fairly cautious however. We recommend carefully picking spots instead of being aggressive.
U.S.:
After underperforming consistently for the past six years, some very short-term outperformance in value versus growth.
Related to this, shift toward industrials and resource sectors in very short term. Technology/Retail still long-term leaders, but there is a clear deceleration.
Areas of strength:
Focus List picks from the top-35 fastest improving industry groups: UNP, HEI, ASGN, FLIR
Watch list names from these groups: SHW, CSX, IEX, IR, ROLL, TDY, FTV
Developed Markets:
Improvement QTD but still overhang from May/June weakness. Several markets back in an Uptrend, including Germany, Switzerland, and Denmark, which join Japan, Australia, and Canada. Waiting on France. Hong Kong is weak, at YTD lows.
Focus List areas of strength:
European Health Care, Energy, Technology: Straumann ( STMN.CH; STMN SW ), Ipsen ( IPN.FR; IPN FP ), DNO ( DNO.NO; DNO NO ), Evolution Gaming ( EVOG.SE; EVO SS )
Japan outsourcing/staffing: SMS ( SMSC.JP; 2175 JP ), Recruit Holdings ( RHCL.JP; 6098 JP )
Emerging Markets:
A majority of markets are in an Uptrend, driven by QTD improvement in LatAm, Southeast Asia, and continued strength in India/Taiwan. China very weak, with indices back in a Downtrend.
Focus List areas of strength:
India banks and industrials: Indusindbank ( IBK.IN; IIB IN ), Yes Bank ( YEB.IN; YES IN ), JSW Steel ( JVS.IN; JSTL IN), Asian Paints ( API.IN; APNT IN )
Taiwan/Korea Tech equip/components: SKC Kolon Pi; SKJ.KR; 178920 KS), Chroma ( CMA.TW; 2360 TT )
Qatar banks: Qatar National Bank ( QNB.QA; QNBK QD )
Frontier Markets:
Clear majority in a Downtrend, but strength in Saudi/Kuwait, and recently in Vietnam.
Areas of strength:
Saudi/Kuwait banks and chemicals: Alina Bank ( ALN.SA; ALINMA AB ), Saudi Basic Industries ( BIC.SA; SABIC AB ), National Bank of Kuwait ( NBK.KW; NBK KK )
Vietnam airlines and real estate dev: Vietjet Aviation ( VJC.VN; VJC VM ), Vincom ( VIC.VN; VIC VM )
