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 Hermes International (RMS.FR; RMS:FP), L’Oreal (OR@F.FR; OR:FP), and Shell (SHEL.GB; SHEL:LN).
Author: Deepashree MC
Won Global View
The U.S. market remains in a Rally Attempt. The S&P 500 and Nasdaq were up 75bps and 100bps, respectively, on lower d/d volume.
The S&P500 is 1% off highs and has resistance at its previous high (5,652), followed by an all-time high (5,670). The Nasdaq regained its
50-DMA, with next resistance at its prior high (18,018).
Won Europe Today
Yesterday,
- European markets traded mixed as investors absorbed the U.S. inflation data, which showed in-line price increases. Traders now expect a 15% chance of a 50bps Fed rate cut, down from the earlier 30%. Focus is now on the European Central Bank meeting, where a 25bps rate reduction is widely anticipated. The U.K.’s GDP remained flat m/m in July.
- Among significant movers on the Stoxx 600, shares of Rentokil (RTO.GB; RTO:LN) plunged more than 20% after the British pest control firm reported weaker sales inNorth America, its largest geographical segment.
- The Stoxx 600 closed flat, with immediate resistance at its 50-DMA (511;+0.2%). We recommend a selective approach to adding names on a high-volume breakout or decisive retake of their key moving averages.
- Among sectors, Retail (+144bps), Technology (+133bps), and Mining (+38bps) led the gains, while Food and Beverage (-31bps) and Utility (-24bps) lagged the most.
- Among major indices, France’s CAC 40 closed 14bps lower. Near-term resistance is at its 50-DMA (+1.1%). Germany’s DAX 30 outperformed other European indices. It gained 48bps, owing to a 16% rally in the shares of Commerzbank (CBK.DE; CBK:GR). The index traded in line with its 50-DMA, with immediate resistance at its 100-DMA.The U.K.’s FTSE 100 declined 15bps, further extending its losses. Support is at its mid-August lows.
- Switzerland recorded its fifth distribution day.
- Seven of the 16 indices we track closed in the green. One index (Belgium) is in a Confirmed Uptrend, five in an Uptrend Under Pressure, and 10 in a Rally Attempt. The average distribution day count stands at 4.16.
- Actionable names in the Focus List include Inditex (IND.ES; ITX:SM), Premier Foods (PFD.GB; PFD:LN), Swedish Orphan Biovitrum (SOBI.SE; SOBI:SS), Galderma (GALD.CH; GALD:SW), Ferrari (RACE.IT; RACE:IM), Vitrolife (VITR.SE; VITR:SS), Rolls-Royce Holdings (RR.GB; RR/:LN), and Novozymes B (NZY.DK; NSISB:DC).
- Of the 32 European Focus List names, 31 ideas are trading above their 200-DMA, while 14 ideas are trading above their 50-DMA.
- Inditex (IND.ES; ITX:SM) was the most prominent gainer among the FL names. The stock traded 4.5% higher, after the apparel retailer reported a rebound in sales of its first autumn-winter collections. The stock is actionable and has retaken its key near-term moving averages.
- Shares of Vitrolife (VITR.SE; VITR:SS) pulled back around 7%. This came after a report from a Swedish investor magazine stating that the shares are richly valued and are expected to decline by approximately 5% over the next two years. The stock is currently testing support at its 10-DMA.
Won Global View
The U.S. market was shifted to a Rally Attempt. The S&P 500 and Nasdaq were up 107bps and 217bps, respectively, on higher d/d
volume and held last Friday’s lows for the third consecutive session, thus opening the window for a follow-through day (+1.7% on higher
d/d volume). The S&P 500 regained all its moving averages with next resistance at its previous high of 5,652, followed by an all-time high
of 5,670. The Nasdaq regained its 100-DMA, with next resistance at its 50-DMA (17,531).
Won Europe Today
Yesterday,
- European markets had a weak session, mainly due to a slump in the banking and energy sectors. Investors exercised caution, focusing on the release of the U.S. inflation data and a potential rate cut by the European Central Bank this week.
- The Automobile sector took a sharp hit with shares of BMW (BMW.DE; BMW:GR) slipping more than 11%. The stock marked its worst single-day fall in four years after the company downgraded its FY24 profit guidance, following weak demand in its key Chinese markets and problems due to a braking system supplied by Continental (CONX.DE; CON:GR).
- The Stoxx 600 failed to reclaim its 50-DMA and declined 0.5% on higher volume. Next support remains at its 200-DMA (501.8; -1.2%). We recommend a selective approach to adding names on a high-volume breakout or decisive retake of their key moving averages.
- Most sectors traded negatively, led by Automobiles (-380bps), Oil and Gas (-171bps), and Banks (-154bps). Food and Beverage (+19bps) was the sole outlier.
- Among major indices, France’s CAC 40 continued to trade in line with its mid-August lows. The index failed to retake near-term resistance at its 50-DMA. It traded below all its key moving averages. Germany’s DAX 30 lost more than 1%, breaking below its 50- and 100-DMA. The index had briefly retaken these moving averages in the previous session. Immediate support is expected at its mid-August highs. The U.K.’s FTSE 100 broke below its 50- and 100-DMAand closed 0.8% lower.
- Italy and Belgium recorded their third distribution day, while Germany and Switzerland logged in their fourth. Denmark and the Netherlands increased their distribution day count to five.
- Italy was shifted to an Uptrend Under Pressure from a Confirmed Uptrend as the index breached its 21-DMA on higher volume.
- All the 16 indices we track closed in the red, except Ireland. One market (Belgium) is in a Confirmed Uptrend, five in an Uptrend Under Pressure, and 10 in a Rally Attempt. The average distribution day count stands at four.
- Actionable names in the Focus List include Biotage (BIOT.SE; BIOT:SS), Premier Foods (PFD.GB; PFD:LN), InPost (INPW.NL; INPST:NA), Swedish Orphan Biovitrum (SOBI.SE; SOBI:SS), Galderma (GALD.CH; GALD:SW), Ferrari (RACE.IT; RACE:IM), and Novozymes B (NZY.DK; NSISB:DC).
- All the 32 European Focus List names are trading above their 200-DMA, while 19 ideas are trading above their 50-DMA. Adidas (ADSX.DE; ADS:GR) was the largest decliner among Focus List names. The stock declined around 3% after it received a downgrade rating due to less favorable prospects in China.
Won Global View
The U.S. market remains in a Downtrend. The S&P 500 and Nasdaq were up 45bps and 84bps, respectively, on lower d/d volume. Immediate resistance for the S&P 500 is at its 50-DMA (5,506) and for the Nasdaq at its 100-DMA (17,142), followed by the 21-DMA (17,287). A follow-through day (+1.7% on higher d/d volume) can occur as early as Thursday, assuming last Friday’s lows hold.
Won Europe Today
We released our European Weekly Summary yesterday. Click here to access the report. Key points from it include:
- The Stoxx 600 declined around 3% last week, breaching its key near- to mid-term moving averages, owing to sluggish GDP growth in theEurozone.
- Leadership has narrowed, with the number of stocks breaking out and trading near the pivot dropping to its mid-August lows.
Won Global View
The U.S. market remains in a Downtrend. The S&P 500 and Nasdaq were up 116 bps each, with higher d/d volume on the S&P 500,
marking the first day of an attempted rally. Immediate resistance for the S&P 500 is at its 50-DMA (5,505) and for the Nasdaq at its 10-
DMA (17,195), followed by the 21-DMA (17,313). A follow-through day (+1.7% on higher d/d volume) can occur as early as Thursday,
assuming last week’s lows hold.
Won Europe Today
On Friday,
- European markets traded choppily, with major indices declining around 1%. Technology, Mining, and Energy slipped more than 2%. U.S employment data showed a lower-than-expected increase in the August employment count. Eurozone’s GDP growth estimate was revised lower to 0.2% q/q for Q2 from an earlier estimate of 0.3% q/q. Key economic releases due ahead this week include the U.K.’s employment and wage data.
- The Stoxx 600 lost 2.5% through the week, losing its four-week gaining momentum. The index recorded its worst weekly performance since early August. It declined more than 1% on higher volume and has breached its 50-DMA. Next supportis at its 200-DMA (-1%). We recommend a selective approach to adding names on a high-volume breakout or decisive retake of their key moving averages.
- Among the significant movers on the Stoxx 600, shares of InPost (INPW.NL; INPST:NA) were up more than 11% after the company reported29% earnings growth in Q2.
- Most sectors closed in the red, led by Technology (-233bps), Mining (-229bps), and Oil and Gas (-201bps). Health Care (+27bps) was the only outlier.
- Among major indices, France’s CAC 40 fell 1%, closing in line with its mid-August low. Germany’s DAX 30 closed 1.5% lower, after a decline in the country’s industrial production. The index breached support levels of its 21-, 50-, and 100-DMA in a single session. Immediate supportis at its August 15 high (18,198; -0.5%). The U.K.’s FTSE 100 declined 0.7% and broke below its 50- and 100-DMA.
- Belgium and Italy recorded their second distribution day, while Switzerland and Germany logged in their third. The Netherlands increased its distribution day count to four.
- Germany was shifted to an Uptrend Under Pressure from a Confirmed Uptrend as the index breached its 100-DMA on higher volume.
- All the 16 indices we track closed in the red. Two markets are in a Confirmed Uptrend, four in an Uptrend Under Pressure, and 10 in a Rally Attempt. The average distribution day count stands at three.
- Actionable names in the Focus List include Biotage (BIOT.SE; BIOT:SS), Premier Foods (PFD.GB; PFD:LN), InPost (INPW.NL; INPST:NA), Swedish Orphan Biovitrum (SOBI.SE; SOBI:SS), Galderma (GALD.CH; GALD:SW), Siegfried ‘R’ (SFZN.CH; SFZN:SW), Ferrari (RACE.IT; RACE:IM), and Novozymes B (NZY.DK; NSISB:DC).
- All the 32 European Focus List names are trading above their 200-DMA, while 16 ideas are trading above their 50-DMA. InPost (INPW.NL; INPST:NA) was the strongest mover among the Focus List names.
Won Global View
The U.S. market was shifted to a Downtrend on Friday. The S&P 500 fell over 4% and breached its 50-DMA (5,505) after briefly testing
all-time highs in the prior week. It closed 5% off highs with next support <1% lower at the rising 100-DMA (5,379). The Nasdaq fell nearly
6%, breaking through its 50-DMA (17,575) early in the week and its 100-DMA (17,118) on Friday. Next support is 2.5% lower at its rising
200-DMA (16,277). The earliest eligibility for a new follow-through day will now be Thursday, September 12.
