The U.S. market was shifted to a Rally Attempt from a Downtrend. The S&P 500 was up 9.5% on higher d/d volume, recording the
highest daily gain since 2008. The Nasdaq gained 12.1% on higher d/d volume, marking the biggest one-day gain since 2001 and the
second-biggest ever. Indices have resistance at their 21-DMA (5,513; 17,199). A follow-through day (a gain of +1.7% on higher d/d
volume) can occur as early as today. However, volume might be a challenge given the high comparable.
Author: Deepashree MC
Won Europe Today
Yesterday,
- European markets closed higher, rebounding from earlier sharp losses as investors reacted to countermeasures proposed by several countries in response to U.S. tariffs. Optimism was also supported by expectations that the European central bank may deliver rate cuts in each of its next four policy meetings. Meanwhile, Asian markets tumbled in early trade after the U.S. confirmed a 104% tariff on Chinese goods, effective today, fueling fresh concerns over escalating trade tensions.
- Significant movers on the Stoxx 600 included the Dutch chip equipment manufacturer Asml Holdings (ASML.NL; ASML:NA) and Astrazeneca (AZN.GB; AZN:LN), which were up 4% and 3%, respectively.
- The Stoxx 600 gained more than 2%, after losing almost 12% in the past four trading sessions. It continued to trade below all its key support levels. We recommend a selective approach to adding names on a high-volume breakout or decisive retake of their key moving averages.
- All sectors closed in the green. Financial Services (+403bps), Travel and Leisure (+381bps), and Technology (+301bps) were the top gainers.
- Among major indices, France’s CAC 40 closed 2.5% higher on lower volume. The index remains well below all its key moving averages. Germany’s DAX 30 rose almost 2.8% and reclaimed support at its 200-DMA. The U.K.’s FTSE 100 ended the day 2.9% higher.
- All indices recorded Day 1 of their rally attempt, except Denmark and Norway, which marked Day 2 of their rally attempt.
- All the 16 indices we track closed in the green and remain in a Downtrend.
- Of the five European Focus List names, four ideas are trading above their 200-DMA, while one is trading above 50-DMA.
- Actionable name in the European Focus List is Talanx (TLXX.DE; TLX:GR).
Won Global View
The U.S. market remains in a Downtrend. The S&P 500 and Nasdaq pulled back from intraday highs and closed 1.6% and 2.2% lower,
respectively, on lower d/d volume. Indices did not undercut Monday’s lows, marking Day 2 of the rally attempt. A follow-through day can
occur as early as tomorrow.
Won Europe Today
We released our European Weekly Summary yesterday. Click here to access the report. Key points from it include:
- European markets plunged more than 9% last week as intensifying U.S.-China tariff tensions triggered broad-based selling across global equities. All major indices, including the Stoxx 600, remain in a Downtrend. The Stoxx 600 is currently testing support levels last seen in early August 2024.
- Market leadership continues to be weak, with limited breakout activity. The number of stocks forming stage-one bases is at its lowest since February 2023, while those trading near pivot levels have declined to levels not seen since late October 2022.
Won Global View
The U.S. market remains in a Downtrend. The S&P 500 closed 23bps lower and the Nasdaq ended 10bps higher on higher d/d volume.
Indices undercut last Friday’s lows but closed in the upper portion of the daily range, marking Day 1 of a Rally Attempt. A follow-through
day (FTD) can occur as early as Thursday.
Won Europe Today
On Friday,
- European markets recorded their steepest intraday decline since the COVID-19 pandemic selloff in 2020. The Stoxx 600 has retreated nearly 12% from its all-time high hit on March 3 and posted a weekly loss of more than 8%, its worst in five years. The sharp downturn was driven by escalating U.S.-China trade tensions, after China responded to earlier U.S. tariffs with a 34% levy on American imports. The Eurozone volatility index also surged on Friday, recording its largest single-day spike in more than two years, underscoring rising investor anxiety over a potential global recession.
- Investors are weighing in a 90% chance on a 25bps rate cut by the European central bank later this month and expect two more reductions to follow by the end of the year.
- The Stoxx 600 declined more than 5% on higher volume. The index has lost more than 8% in the past three sessions and has breached support at its 100- and 200-DMA. It traded below all its key moving averages and hit new lows. We recommend a selective approach to adding names on a high-volume breakout or decisive retake of their key moving averages.
- All sectors closed in negative territory, with Banks (-831bps) and Mining (-731bps) leading the decline.
- Among major indices, France’s CAC 40 failed to reclaim support at its 200-DMA and fell more than 4%, weighed by weakness across the China-exposed luxury stocks. Immediate support is at its December 2024 low. Germany’s DAX 30 gapped down on heavy volume, closing 4.7% lower. The index has breached its 100-DMA and has next support at its 200-DMA (-3%). The U.K.’s FTSE 100 broke below support at its 100- and 200-DMA intraday and closed almost 5% lower. The index was hitting new lows, with no near-term support levels.
- Portugal recorded its third distribution day.
- Ireland and Switzerland were downgraded to a Downtrend from an Uptrend Under Pressure after the indices breached all their moving averages. Portugal was shifted to an Uptrend Under Pressure from a Confirmed Uptrend, while Spain was downgraded to a Downtrend from an Uptrend Under Pressure after both indices breached their respective 50-DMA. Twelve indices hit new lows on Friday.
- All the 16 indices we track closed in the red. All indices are in a Downtrend, except Portugal, which remains in an Uptrend Under Pressure. The average distribution day count stood at three.
- Of the nine European Focus List names, all ideas are trading above their 200-DMA, while four ideas are trading above their 50-DMA.
- There are no actionable names in the European Focus List as of now.
Won Global View
The U.S. market remains in a Downtrend. The S&P 500 and Nasdaq were down 9% and 10%, respectively, for the week. They both
undercut Monday’s lows, the lows from mid-March, and both August/September 2024 lows of bases that had been established then. The
weekly losses were the largest since March 2020. The S&P 500 has its next level of support just below ~5,000 from Q1 2024 lows. The
Nasdaq’s base low from Q1 2024 was near 15,200. Indices are more than 10% below their 21-DMA and 8% below what had been prior
support at March lows (5,405; 17,238). Further, the Nasdaq had a “death cross,” with the 10-WMA crossing below the 40-WMA for the first
time since March 2023. The S&P 500 narrowly missed this occurring, but it is almost a certainty in the coming weeks.
Won Global View
The U.S. market was shifted to a Downtrend. The S&P 500 and Nasdaq were down 5% and 6%, respectively, undercutting Monday’s
lows and resetting the rally attempt count. The S&P 500 is testing support at the September 2024 low of ~5,400, with the next level of
support at ~5,200. The Nasdaq breached the September 2024 low of 16,668, with next support at ~16,000. A follow-through day (a gain of
1.7% or more on higher d/d volume) can occur on Wednesday at the earliest if the new low is not undercut.
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 Anglo American (AAL.GB; AAL LN), Adidas (ADSX.DE; ADS GR), CVC Capital Partners (CCPW.NL; CVC NA), and Kuehne Und Nagel International (KNIN.CH; KNIN SW).
Won Europe Today
Yesterday,
- European markets ended lower, with most sectors posting declines, led by weakness in Health Care stocks. Investors are concerned that broad and immediate tariffs could strain global trade flows and add to inflationary pressures, potentially weighing on Europe’s economic outlook.
- Among key movers on the Stoxx 600, shares of Svitzer (SVG.DK; SVITZR:DC) jumped 30% after A.P. Moller Holding offered to buy the company for $1.3B. Meanwhile, shares of Grifols (PROB.ES; GRF:SM) rose 3% following news that Brookfield is in discussions with its shareholders over a possible renewed takeover bid.
- The Stoxx 600 recorded its second consecutive session of losses and closed 0.5% lower. Immediate support is at its 100-DMA (-1.5%), followed by its 200-DMA (-2.8%). We recommend a selective approach to adding names on a high-volume breakout or decisive retake of their key moving averages.
- Overall sector performance was negative. Health Care (-178bps), Telecommunications (-113bps), Basic Resources (-80bps), and Oil & Gas (-59bps) lagged the most, while Retail (+92bps), Travel & Leisure (+61bps), and Utility (+32bps) were the sole gainers.
- Among major indices, France’s CAC 40 closed 0.2% lower. Immediate support is at its 100-DMA (-2%). Germany’s DAX 30 declined 1.2% and tested support at its 50-DMA. Next support is at its 100-DMA (-6%). The U.K.’s FTSE 100 continued to face stiff resistance at its declining short-term moving averages and closed 0.3% lower. Support is at its 100-DMA (-1.7%).
- Thirteen of the 16 markets we track closed in the red. One is in a Confirmed Uptrend, eight in an Uptrend Under Pressure, two in a Rally Attempt, and five in a Downtrend.
- Belgium recorded its fifth distribution day. The total average distribution day count stood at 4.55.
- Of the 16 European Focus List names, 15 ideas are trading above their 200-DMA, while eight ideas are trading above their 50-DMA.
