On Thursday, the Stoxx 600 ended 1.14% below last Friday’s close. Of the 17 indices we cover, seven are in a Confirmed Uptrend and 10 in an Uptrend Under Pressure. This week, we downgraded Italy and France to an Uptrend Under Pressure after they breached their 50-DMA.
Author: Midhun Parameswaran
Global Focus Developed
Australia’s ASX All Ordinaries Index declined 0.6% this week. The index breached support along its 21-DMA but is trading less than 5% below its 52-week high. It is in a Confirmed Uptrend with five distribution days after adding two this week. One distribution day will expire next week.
Global Focus Emerging
The CSI 300 fell 0.23% on higher and above average volume this week. The market remains in an Uptrend Under Pressure with the number of distribution days decreasing to four. The index traded around the 200-DMA (5,095, +0.5%), with no clear support until May’s low of ~4,900 (-3.3%). The index faces resistance at the 21-DMA (~5,150, +1.6%), 50-DMA (~5,170, +2.0%), and 100-DMA (5,180, +2.2%).
Global Focus Frontier
Ho Chi Minh City Development Joint Stock Commercial Bank (HD Bank) is one of the top banks in Vietnam and is a constituent of the VN30 Index. Its industry-leading growth and key financial ratios, along with its exposure to the consumer finance industry, will drive its growth.
China A Shares
The CSI 300 fell 3.03% on lower and below average volume this week. The market remains in an Uptrend Under Pressure with the number of distribution days increasing to five. The index traded around the converged 21- and 100-DMA (~5,200, +2.3%) for four sessions but Friday gapped down to open below these two key support levels and breached the 50-DMA (~5,170, +1.8%) and 200-DMA (5,085, +0.1%) with no clear support until May’s low at ~4,900 (-3.6%). January-May industrial profits rose 83.4% y/y (versus 106.1% of January-April), a CAGR of 21.7% from 2019. June’s official manufacturing PMI (50.90) was higher than expectations (50.35) but lower than May (51.00). Caixin manufacturing PMI (51.3) missed both expectations (51.8) and May’s reading (52.0). EV battery stocks led the gains, boosted by reports that Contemporary Amperex Tech (CO1.CN) extended a battery supply deal with Tesla to 2025. Apparel stocks also gained, boosted by upbeat Q2 earnings guidance on the strong business recovery. Health Care stocks outperformed, boosted by the government’s encouragement of the development of Chinese medicine. Military and Financial stocks lagged. Energy stocks fell sharply as the government released coal reserves to the market, so prices are expected to fall. Turning to the second half of the year, uncertainties surrounding the economic recovery dampened market sentiment. We advise investors to be cautious as the index breached three key moving averages in one session. Q2 financial results remain the short-term catalysts before August.
US Focus
The U.S. market remains in a Confirmed Uptrend. The S&P 500 and Nasdaq rallied sharply for a second straight week, pushing further into all-time highs. Both indices have begun a new trend higher after breaking out last week. The S&P 500 is trading ~1.5% below its upper channel line which is now rising above 4,400. We continue to view near-term support along the rising 10- and 21-DMA for both indices. The distribution day count remains low at two and four, respectively, with one day expiring on the Nasdaq next week.
European Focus
On Thursday, the Stoxx 600 closed 0.44% below last Friday’s close. We downgraded Austria and Ireland to an Uptrend Under Pressure as both indices breached their respective 50-DMA on strong volume. Of the 17 indices we cover, 10 are in a Confirmed Uptrend, including all the major indices, except the U.K
Global Focus Developed
Australia’s ASX All Ordinaries Index gained 0.1% this week. The index is trading above all key moving averages and close to its 52-week high. It is in a Confirmed Uptrend with three distribution days.
Global Focus Emerging
The CSI 300 fell 3.03% on lower and below average volume this week. The market remains in an Uptrend Under Pressure with the number of distribution days increasing to five. The index traded around the converged 21- and 100- DMA (~5,200, +2.3%) for four sessions but Friday gapped down to open below these two key support levels and breached the 50-DMA (~5,170, +1.8%) and 200-DMA (5,085, +0.1%) with no clear support until May’s low at ~4,900 (-3.6%).
Global Focus Frontier
Ho Chi Minh City Development Joint Stock Commercial Bank (HD Bank) is one of the top banks in Vietnam and is a constituent of the VN30 Index. Its industry-leading growth and key financial ratios, along with its exposure to the consumer finance industry, will drive its growth.
