Bldg-Woods Products industry group (IG) has been the most consistent performer in 2021. The IG gained 3% in the past week and 57% in 2021 year-to-date. Group Rank has improved to 22 from 73 in the past four weeks. The key driver for this segment has been the rising lumber prices. Per Bloomberg, lumber futures prices have gained more than 60% this year. Leading stocks: UFP Industries (UFPI) and Louisiana Pacific Corp (LPX) are extended from ideal entry points, while West Fraser Timber (WFG) is actionable after breaking out from a stage-three seven-week cup base.
Author: Anuj Kumar Chouhan
Won Europe Today
- European markets were mixed with major markets in negative territory. The Stoxx 600 closed 0.13% lower as Basic Resources and Autos lost more than 75bps.
- The threat of coronavirus remains one of the major focus areas for the market. A flurry of earnings statements, including a surprise loss reported by Renault (RENU.FR; RNO FR) and negative guidance from AstraZeneca (AZN.GB; AZN LN) due to coronavirus, was also a drag on investor sentiment.
Economic Summary
The U.S. economy expanded 2.1% (annualized) in Q3, a 20bps increase from the advance estimates. This was above
Q2 expansion of 2%. Personal consumption expenditure was left unchanged, while federal, state, and local
government spending along with private inventories were revised upward. Meanwhile fixed and business investment
remained a drag for the growth.
Economic Summary
Q2 GDP growth in line with consensus.
The U.S. economy expanded 2% (annualized) in Q2, unchanged from the second estimate. This was below Q1
expansion of 3.1% but in line with consensus. Personal consumption expenditure, nonresidential fixed investment, and
imports were revised downward, while state and local government spending and exports were revised upward.
Economic Summary
Q2 GDP growth revised down by 10bps.
The U.S. economy grew 2% (annualized) in Q2 according to the second estimates. This compares with Q1 growth of
3.1% but was in line with consensus. Personal consumption expenditure, federal government spending, and state and
local government spending contributed positively while nonresidential and residential fixed investment, exports
posted negative contribution.
Won Europe Today
We released our weekly Global Laggards report yesterday . 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 Iss (ISS.DK; ISS:DC), Ipsen (IPN.FR; IPN:FP), Brenntag(Xet) (BNRX.DE; BNR:GR), Bbv.Argentaria (BBVA.ES; BBVA:SM)and Morrison(
)spmkts (MRW.GB; MRW:LN).
WON Global View
Normal down wave of just over 7% for the S&P 500. Quick retake of 200-DMA is similar setup to December 2012. If we get a
follow-through day from here, this is the most immediate bullish setup.
Won Europe Today
Market action was quite constructive with major bourses inching up and the Stoxx 600 closing 0.31% higher. Utilities and Real Estate stocks outperformed while trade-sensitive Autos and Basic Material closed in the red.
The threat of the EU fining Italy for violation of debt rules and Denmark’s parliamentary election results, where the left won, were the focus of markets.
We upgraded the Stoxx 600 and the U.K’s FTSE 100 along with Ireland, Finland, Norway, Sweden, Austria, Italy, and Spain to a Rally Attempt from a Downtrend after they remained above their respective lows on Friday for three successive trading sessions.
WON Global View
The U.S. market is in a Downtrend. The S&P 500 and Nasdaq rose for a second straight session, holding above 200-DMA support and the lows from Monday. The market status will shift to a Rally Attempt at the close today should Monday’s lows continue to hold. We will begin looking for a follow-through day as early as tomorrow.
Won Europe Today
European markets closed 0.83% higher, buoyed by the possibility of a U.S. interest rate cut. The Stoxx 600 closed 0.74%
higher. The major gainers were Travel & Leisure, Insurance, and Technology.
The Ishares Dj Stoxx 600 is still in a downtrend. We welcome the much‐needed bounce and will be looking for Monday’s
lows (EXSA.DE @ 36.74) to hold over the next two sessions before watching for a follow‐through day as early as Friday.
Among other major markets, France’s CAC 40, Germany’s DAX, and the U.K.’s FTSE all went up by 0.51%, 1.51%, and
0.41%, respectively, on higher volume. Only three countries ‐ Denmark, Norway, and Switzerland ‐ were in negative
territory.
