The U.S. market remains in a Confirmed Uptrend. The S&P 500 gained ~30bps, while the Nasdaq gained ~15bps on lower volume. The
S&P 500 is trading at all-time highs with immediate support at its 10-DMA (5,643). The Nasdaq is trading 4% off highs, testing resistance
near August highs (~18,018), and has immediate support near its 10-DMA (17,693). The distribution day count remains at zero and one,
respectively.
Author: Deepashree MC
Won Europe Today
On Friday,
- European markets failed to extend their momentum from the previous session following the oversized rate reduction by the Federal Reserve. The Automobile sector was a major decliner, owing to a 6.8% drop in the shares of Mercedes Benz (MBGX.DE; MBG:GR) after the company revised its annual profit margin outlook downward for the second time in less than three months.
- Among important economic releases, the U.K.’s retail sales grew better than expected in August, while Germany’s PPI data came in slightly higher than expected during the month.
- The Stoxx 600 closed 1.4% lower, breaking below its 21- and 100-DMA intraday on lower volume. Immediate support is at its 10-DMA, followed by its 50-DMA. We recommend a selective approach to adding names on a high-volume breakout or decisive retake of their key moving averages.
- Most sectors closed lower, led by Automobiles (-359bps), Technology (-272bps), and Mining (-270bps). Utility (+48bps) and Telecommunications (+5bps) were the sole outliers.
- Among major indices, France’s CAC 40 slid 1.5% on higher volume and closed below its 21-DMA. Next support is at its 50-DMA (-0.5%). Germany’s DAX 30 declined 1.4%, with near-term support at its 21-DMA. The U.K.’s FTSE 100 breached support at its 10-, 21-, 50-, and 100-DMA intraday. The index closed 1.2% lower, with support at its September 11 low.
- Nine of the 16 indices we track recorded a distribution day. Denmark and the Netherlands logged in their eighth and sixth distribution day, respectively. The average distribution day count stands at four.
- All the 16 indices we track closed in the red. Six indices are in a Confirmed Uptrend, four in an Uptrend Under Pressure, and six in a Rally Attempt.
- Of the 32 European Focus List names, 31 ideas are trading above their 200-DMA, while 23 ideas are trading above their 50-DMA.
- Novo Nordisk ‘B’ (NON.DK; NOVOB:DC) was the strongest mover among the FL names, with its shares declining 5.4% after the results of the phase 2 trial of its experimental obesity pill came below the desired levels. The stock broke below its 200-DMA on strong volume. Support is at the bottom of its current base (DKK 810; -5%).
- Actionable names in the Focus List include Swedish Orphan Biovitrum (SOBI.SE; SOBI:SS), Schneider Electric (QT@F.FR; SU:FP), Swissquote ‘R’ (SQN.CH; SQN:SW), Vitrolife (VITR.SE; VITR:SS), Galderma (GALD.CH; GALD:SW), Ferrari (RACE.IT; RACE:IM), 3i Group (III.GB; III:LN), Nkt (NKT.DK; NKT:DC), Eqt (EQT.SE; EQT:SS), Premier Foods (PFD.GB; PFD:LN), and Novozymes B (NZY.DK; NSISB:DC).
Won Global View
The U.S. market has been upgraded to a Confirmed Uptrend. The S&P 500 was up 1.4% last week, staging a Day 9 follow-through on
Thursday and moving into all-time highs. The Nasdaq rose 1.5% for the week but narrowly missed a follow-through day on Thursday, as
volume was slightly lower than the prior day. It is testing the midpoint of a 10-week range (18,018) and remains about 4% off all-time highs.
The Nasdaq did pick up a distribution day last Friday, while the S&P 500 avoided one. Rising 21-DMA support for each index is 2–2.5%
below (5,585/17,515).
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 stocks include Clariant (CLN.CH; CLN:SW), Moncler (MONC.IT; MONC:IM), Evolution (EVOG.SE; EVO:SS), Beiersdorf (BEIX.DE; BEI:GR), Jyske Bank (JYS.DK; JYSK:DC), and Universal Music Group (UNMG.NL; UMG:NA).
Won Global View
The U.S. market has been upgraded to a Confirmed Uptrend. The S&P 500 was up 1.7% on higher d/d volume, staging a Day 9 follow through and closing at new highs. The Nasdaq was up 2.5% on lower volume. It is testing resistance near its August highs (18,018) and trading 4% below July highs (18,671).
Won Europe Today
Yesterday,
- European markets closed lower, with investors exercising caution ahead of the Fed’s interest rate decision. However, global equities are expected to turnaround, with a higher-than-expected 50bps rate cut from the Fed, which came in later in the day. Among key economic releases, the U.K.’s inflation remained unchanged m/m in August, in line with estimates. This data is likely to influence the Bank of England’s monetary policy decision at the meeting today.
- Among top movers, shares of Italian spirit manufacturer Campari (CPR.IT; CPR:IM) declined more than 7% following the sudden departure of its CEO within five months of the current tenure.
- The Stoxx 600 lost around 0.5%, dropping below its 21- and 100-DMA on lower volume. Next support is at its 50-DMA (-0.4%). We recommend a selective approach to adding names on a high-volume breakout or decisive retake of their key moving averages.
- Among sectors, Automobile (+15bps) and Oil and Gas (+9bps) were the sole gainers, while Food and Beverage (-101bps), Utility (-89bps), and Chemical (-76bps) led the losses.
- Among major indices, France’s CAC 40 declined 57bps and closed below its 50-DMA. Near-term support is at its 10-DMA (-0.2%). Germany’s DAX 30 closed flat, trading in line with its early September lows. The U.K.’s FTSE 100 declined 68bps after advancing for four straight sessions. The index breached its 21-DMA and tested support at its 100-DMA.
- Italy and Denmark recorded their fourth and seventh distribution day, respectively.
- All the 16 indices we track closed in the red, except Austria and Finland. Three indices are in a Confirmed Uptrend, five in an Uptrend Under Pressure, and eight in a Rally Attempt. The average distribution day count stands at 4.67.
- Of the 32 European Focus List names, all ideas are trading above their 200-DMA, while 23 ideas are trading above their 50-DMA.
- Swissquote ‘R’ (SQN.CH; SQN:SW) was the biggest gainer among the Focus List names, rising 1.1%. The stock has traded constructively in the past few sessions after finding support at its 100-DMA.
- Vitrolife (VITR.SE; VITR:SS) was the heaviest decliner among the Focus List names, dropping around 3.2%. The stock is trading in its actionable region. It breached its 21-DMA, with next support at its 50-DMA (-4.5%).
- Actionable names in the Focus List include InPost (INPW.NL; INPST:NA), Lottomatica Group (LOTG.IT; LTMC:IM), Vitrolife (VITR.SE; VITR:SS), Galderma (GALD.CH; GALD:SW), Ferrari (RACE.IT; RACE:IM), Rolls-Royce Holdings (RR.GB; RR/:LN), 3i Group (III.GB; III:LN), Nkt (NKT.DK; NKT:DC), Eqt (EQT.SE; EQT:SS), Premier Foods (PFD.GB; PFD:LN), and Novozymes B (NZY.DK; NSISB:DC).
Won Global View
The U.S. market remains in a Rally Attempt. The S&P 500 and Nasdaq had a downside reversal on heavy volume and declined ~30bps
each. The S&P 500 made a new high intraday but pulled back and closed below that level for the second consecutive session. It is trading
1% off highs and has immediate support at its rising short-term moving averages. The Nasdaq has resistance near its August high
(18,018, +3%) and has immediate support at its 50-DMA (17,464), which coincides with its 10-DMA.
U.S. Economic Summary
Q2 GDP rose 20bps above estimates: mer the second estimate, the U.S. economy grew 3% y/y in Q2, 20bps above estimates and higher than 1.4% y/y growth in Q1. This marks a rebound from a dec\ine in GDm growth in the \ast two consecutive quarters. Growth was driven by increases in consumer spending, private inventory investment, and non-residentia\ fixed investment, despite a rise in imports.l
Won Europe Today
We released our European Weekly Summary yesterday. Click here to access the report. Key points from it include:
- European markets ended higher last week, with major indices trading near their 52-week highs. Of the 16 indices we track, 10 are trading above their 50-DMA. Near-term volatility is expected as the market anticipates key interest rate decision from the Fed on Wednesday.
- Sectors closed positive last week. Technology, Transportation, Capital Equipment, and Materials closed 3–4% higher. Health Care and Consumer Staple lagged but gained 0.1–0.2%. On our rotation graphs, Transportation entered the best quadrant, while Consumer Cyclical continued to show negative short-term momentum and remains in the worst quadrant.
Won Global View
The U.S. market remains in a Rally Attempt. The S&P 500 and Nasdaq were up 3bps and 20bps, respectively, on higher d/d volume.
The S&P 500 touched an all-time high intraday but pulled back and closed below that level. It is 1% off highs and has resistance at its
recent high (5,652), followed by an all-time high (5,670). The Nasdaq has next resistance at the prior high (18,018), with support at its 50-
DMA (17,481).
