Q4 GDP expanded 7%, the strongest in five quarters: The U.S. economy grew 7% in Q4, according to the second estimate, in line with market expectations and 10bps above the advance estimate. The expansion for the quarter reflected the increases in private inventory investment, exports, personal consumption expenditure (PCE), and non-residential fixed investment, which were partly offset by decreases in federal, state, and local government spending.
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Won Global View
The U.S. market is in a Downtrend. The S&P 500 and Nasdaq staged upside reversals, finding support at 4,114 and 12,587,
respectively. Both now face near-term resistance at the sharply rolling 21-DMA (S&P 500: 4,427; Nasdaq: 13,901). We will now be looking for indices to hold above yesterday’s lows through Monday before looking for a follow-through day as early as Tuesday.
WON Europe Today
We released our Weekly Global Laggards Report today. Click here to access the report. The stocks highlighted in this
report are laggards relative to their own domestic markets. We recommend that they be underweighted as they may be
vulnerable to further downside risk and underperformance. European names highlighted this week include Outokumpu
(OUTO.FI; OUT1V:FH), LegImmobilien (LEGX.DE; LEG:GR), ABB (ABBN.CH; ABBN:SW), Michelin (MCL.FR; ML:FP),
Puma (PUMX.DE; PUM:GR), Carlsberg (CAB.DK; CARLB:DC), Amundi (AMUN.FR; AMUN:FP), Essilorluxottica (EI.FR;
EL:FP), and Deutsche Post (DPWX.DE; DPW:GR).
Won Global View
The U.S. market has been downgraded to a Downtrend. The S&P 500 and Nasdaq undercut January lows (S&P 500: 4,222;
Nasdaq: 13,094), resulting in the first follow-through day (1/31) officially failing. The S&P 500 continues to test support along its January low while the next level of price support on the Nasdaq is along ~13,000. The market status has been downgraded to a Downtrend and we will monitor for signs of a new follow-through day.
WON Europe Today
Yesterday,
- European markets had another weak day with most indices closing in the red. Major indices have formed bearish
chart patterns and broken down technically. We recommend that investors stay away from markets and book
profits in extended names. - The Stoxx 600 formed a downside reversal after finding resistance at 460 price levels. The index is trading below its
200-DMA and is in Day 2 of a Rally Attempt. Among sectors, Retail stocks were down 1.9% while Banks declined
0.7%. - Among other major indices, France’s CAC has been shifted to a Downtrend after it breached its 200-DMA.
Germany’s DAX continues to trade below its 200-DMA while the U.K.’s FTSE 100 is testing support at its 50-DMA. - Among the 17 major indices that we track, Belgium, Norway, Luxembourg, and the U.K. closed in the red. Sweden
has been downgraded to a Downtrend after it breached all its key moving averages. - Actionable names in the Focus List include Compass Group (CPG.GB; CPG:LN), Sanlorenzo (SANL.IT; SL:IM),
Vinci (DG@F.FR; DG:FP), and Oci (OCIO.NL; OCI:NA).
WON Europe Today
Yesterday,
- European markets were volatile and ended flat. The concern over the possible economic damage due to the
tension between Russia and Ukraine weighed down the markets. We recommend a patient approach to adding
risk. Continue to focus on high quality ideas with an improving RS line while reducing exposure to ideas breaking
below their long-term support levels. - The Stoxx 600 ended flat with marginal gain of 0.1%. The index is trading below its 200-DMA and 8% off highs. It
has immediate support at ~$446 (1.9% below). Sectors were mixed, with Technology up 0.8% and Banks closing
0.3% lower. - Among major indices, the U.K.’s FTSE is finding support at its 50-DMA, while France’s CAC breached its 200-DMA
during market open yesterday but managed to close above this key support level. Germany’s DAX is trading below
its 200-DMA. - Among the 17 indices we cover, the close was mixed from flat to marginally in the red, with Austria declining the
most, down 1.6%. Eight indices are in an Uptrend Under Pressure, one in a Rally Attempt, one in a Confirmed
Uptrend, and the remaining seven in a Downtrend. Austria was shifted to a Downtrend after the index breached all
its key moving averages. The average distribution day count stands at 4.1. - Actionable names in the Focus List include Compass Group (CPG.GB; CPG:LN), Sanlorenzo (SANL.IT; SL:IM),
Vinci (DG@F.FR; DG:FP), and Oci (OCIO.NL; OCI:NA).
Won Global View
The U.S. market remains in an Uptrend Under Pressure. The S&P 500 and Nasdaq pulled back toward January low support (S&P 500: 4,222; Nasdaq: 13,094), remaining below all key moving averages including near-term resistance at the 21-DMA (S&P 500: 4,463; Nasdaq: 14,034). Distribution continues to cluster with the count increasing to four and six, respectively.
WON Europe Today
We released our European Weekly Summary today. Click here to access the report. Key points from it include:
The Stoxx 600 was downgraded to a Downtrend after the index breached its January 24 low. We recommend a
defensive approach given the recent downgrade of several European markets.
From our rotation chart, short-term momentum (over four weeks) continues to improve in Energy and Financial and
accelerating among defensive Consumer Staples.
European Focus List Update: Added Oci; Removed Rvrc Holding, Infineon, Teleperformance, and Indutrade.
Won Global View
The U.S. market remains in an Uptrend Under Pressure. The S&P 500 and Nasdaq reversed from 21-DMA resistance, closing near the lows of the week and adding additional distribution. There is no clear level of support until January lows (S&P 500: 4,222; Nasdaq: 13,094). The distribution day count increased to four and five, respectively.
Won Global View
The U.S. market remains in an Uptrend Under Pressure. The S&P 500 and Nasdaq reversed from 21-DMA (S&P 500: 4,491; Nasdaq: 14,154) resistance to close at the lows of the session in higher volume. There is no clear level of support until January lows (S&P 500: 4,222; Nasdaq: 13,094). The distribution day count increased to three and four, respectively.
