The U.S. market remains in a Confirmed Uptrend. The S&P 500 and Nasdaq remain at all-time highs and are consolidating gains above
support at the rising 10- and 21-DMA. The distribution day count remains at two and four, respectively, with no signs of high volume selling
in two weeks.
Author: admin
U.S. Economic Summary
- Q1 GDP expanded 6.4% :
The U.S. economy grew 6.4% in Q1, according to the final figure, same as the advance and second estimates, and in line with the consensus. Expansion for the quarter reflected positive contributions from personal consumption expenditures (PCE), non-residential fixed investment, federal government spending, residential fixed investment, and state and local government spending. - Personal spending remains flat, below consensus:
Personal spending remained flat m/m in May. The increase in spending for services was mostly offset by a decline in spending for goods. Within services, increases were widespread, led by recreation services, food services and accommodations, as well as housing and utilities. A decrease in spending on motor vehicles and parts was the leading contributor to the decrease in spending for goods. - 10-year bond yield continues to decline:
The 10-year yield lost 11bps in June and closed at 1.47%. The two-year bond yield gained 11bps in June to close at 0.25%. - Unemployment rate edges up; NFP above expectations:
The unemployment rate increased 10bps m/m to 5.9% in June, down from 14.8% in April 2020, but still up from 3.5% in February 2020. Number of unemployed people increased by 168K to 9.48M, while employment levels fell by 18K to 151.6M. The labor force participation rate was unchanged at 61.6%. Non-farm payrolls increased 850K (versus consensus of 700K gain). Employment increased in leisure and hospitality (+343K), and public and private education.
Won Europe Today
Yesterday,
- European markets closed in positive territory despite concerns over the rising incidence of cases of a contagious
Delta variant of COVID-19. - The Stoxx 600 gained 0.33% on lower volume, retaking its 10-DMA and finding resistance at its 21-DMA. Chemical
and Financial stocks led gains for the index. The index is in a Confirmed Uptrend with three distribution days. - Among the other major indices, France’s CAC was unable to retake its 10- and 21-DMA. Germany’s DAX gained
0.88% on higher volume, retaking its short-term moving averages. The U.K.’s FTSE 100 was up on lower volume
after underperforming yesterday. The index is an Uptrend Under Pressure with seven distribution days. - Portugal was the only index to end in negative territory. Market status remained unchanged for all markets.
- We added B&M European (BME.GB; BME:LN) to our actionable list. Other actionable names in the Focus List
include Soitec (SOI.FR; SOI:FP), Paragon Banking Group (PAG.GB; PAG:LN), Yougov (YOU.GB; YOU:LN), Trigano
(TRI.FR; TRI:FP), AirBus (AIRS.FR; AIR:FP), Interroll (INRN.CH; INRN:SW), Asml (ASML.NL; ASML:NA), Beneteau
(CHBE.FR; BEN:FP), Teleperformance (ROFR.FR; TEP:FP), Dassault Systèmes (DSY.FR; DSY:FP), EQT
(EQT.SE; EQT:SS), and Puma (PUMX.DE; PUM:GR).
Won Global View
The U.S. market remains in a Confirmed Uptrend. The S&P 500 and Nasdaq traded relatively flat yesterday, consolidating sharp gains
over the last week. Overall action remains constructive with each index trending above all major moving averages, including near-term
support along the rising 21-DMA. Distribution remains a non-factor at two and four days, respectively.
Won Europe Today
We released our European Weekly Summary yesterday, click here to access the report.
- We remain positive on European equities and recommend that investors add to positions in stocks breaking out of
consolidation or forming the right side of a base on strong accumulation. Of the 17 indices we cover, including the
Stoxx 600, 12 are in a Confirmed Uptrend and five in an Uptrend Under Pressure. Distribution remains at a
historically low level. - In a great first half for European equities, the value part of the market has been leading, but over the past three
months, this trade has lost steam; since April, growth has started to re-emerge. It may be too early to call, but
investors should be ready soon for a new rotation toward value as our three-month oscillation chart of Value versus
Growth points out the historically extended nature of growth versus value.
Won Global View
The U.S. market remains in a Confirmed Uptrend. The S&P 500 and Nasdaq are beginning to trend at new highs. The 10- and 21-DMA
are again turning higher and will act as near-term support should indices consolidate. The distribution day count remains low at three and
four, respectively, with another day expiring on the S&P 500 today.
Won Europe Today
Friday,
- Most major European markets were flat with low volume. Finland and Sweden were closed due to a market holiday.
France, Ireland, and Denmark were the only markets to end in negative territory with none recording a distribution
day. - The Stoxx 600 is finding support at its 21-DMA with two distribution days. On thesectoral front, Basic Resources
led the gains, while Leisure stocks declined the most. - Among other major indices, the U.K.’s FTSE 100 is in an Uptrend Under Pressure with six distribution days while
Germany’s DAX is in a Confirmed Uptrend. France’s CAC ended in the red, though on lower volume. - Portugal, Spain, and Luxembourg are the markets in an Uptrend Under Pressure, while others are in a Confirmed
Uptrend. - We added Gn Store Nord (GSN.DK; GN:DC) and Intesa Sanpaola (ISP.IT; ISP:IM) to our actionable list as the
former is forming the right side of a cup base while the latter broke out of a flat base. Actionable names in the
Focus List includeSoitec (SOI.FR; SOI:FP), Paragon Banking Group (PAG.GB; PAG:LN), Yougov (YOU.GB;
YOU:LN), Trigano (TRI.FR; TRI:FP), AirBus (AIRS.FR; AIR:FP), Interroll (INRN.CH; INRN:SW), Asml (ASML.NL;
ASML:NA), Beneteau (CHBE.FR; BEN:FP), Teleperformance (ROFR.FR; TEP:FP), Dassault Systèmes (DSY.FR;
DSY:FP), and EQT (EQT.SE; EQT:SS).
Won Global View
The U.S. market remains in a Confirmed Uptrend. The S&P 500 shook out briefly below its 50-DMA only to push right back into new alltime highs last week. The Nasdaq, which has been leading over the last few weeks, broke out from a 19-week consolidation into new alltime highs. We continue to view the rising 21-DMA as a key level of near-term support for both indices. The distribution day count has declined to a reasonable three and four days, respectively, with one additional day set to expire on the S&P 500 this week.
Won Europe Today
We released our Weekly Global Laggards Report yesterday (please 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
Securitas B (SUBF.SE; SECUB:SS), Christian Hansen (CHR.DK; CHR:DC), and Air France-Klm (UTA.FR; AF:FP).
Won Global View
The U.S. market remains in a Confirmed Uptrend. The S&P 500 and Nasdaq continue to display positive technical action, each gapping
up into all-time highs yesterday. We continue to view the 21-DMA as a near-term level of support, specifically if indices begin to trend into
higher highs. The distribution day count remains low at three and four, respectively, with one additional day expiring on the S&P 500 next
week.
