Author: Neeraj Khanna
US Focus Long
U.S. indices broke lower this week, picking up distribution along the way. Though both the
S&P 500 and Nasdaq are still trading within a range, many ideas have begun the process of
forming new bases as we head into Q3 earnings season. The S&P 500 also broke below nearterm
price support and the Nasdaq undercut its 50-day moving average. Therefore, the market
has been moved to Uptrend Under Pressure until we see support come into both the major
averages and leadership ideas alike.
European Focus Long
A strong Friday rally propelled European markets upwards 1.3% on
average to close the week with gains of 0.6% on average, the first positive
week after two consecutive down weeks. The first producer price index
increase in China in four years alleviated some economic concerns
and positive earnings from U.S. banks were behind the move higher.
Five markets, Spain (+1.6%), Norway (+1.5%), Italy (+1.2%), Austria
(+1.1%), and Ireland (+1.1%) gained more than 1%, while Portugal was
the best performing market, gaining 3%.
Global Focus Developed Long
Australia’s ASX All-Ordinaries Index lost 0.5% this week, closing
just slightly under its 10-week moving average. There has been no
net movement in the index for the past 13 weeks. It remains in a Rally
Attempt.
Global Focus Emerging Long
China exports fell 10% in September, well below consensus expectations
of a 3% decline. Imports also disappointed, falling 1.9% on-year, while
expectations were a 1% increase. Decline in import volumes were partly
attributed to key commodities such as iron ore and copper, which
could point to signs that recovery of economic activity could be losing
momentum.
Global Focus Frontier Long
Semiconductors with Ruben Roy – October 13, 2016
Ruben Roy is an Executive Director, Research, at William O’Neil + Company specializing in the semiconductor supply chain and its broader ecosystem. He has deep experience valuing technology stocks, having been an equity analyst focusing on the global semiconductor industry for more than 15 years, with tenures at Piper Jaffray, Pacific Crest Securities, and Thomas Weisel Partners. Prior to working on Wall Street, Ruben was an electrical engineer at Sensormatic Electronics Corporation. Ruben will cover longer-term industry themes, nearer-term trends, thoughts on the upcoming earnings season and commentary on specific William O’Neil Focus List and Interest List stocks.
EPS Rank Study
In this paper, we examine the effectiveness of using William O’Neil +Co.’s proprietary Earnings Per Share (EPS) Rank as a primary factor in managing a portfolio of U.S. equities. Our study included nearly 12,000 U.S. equities from January 1995 to December 2015.
US Focus Long
U.S. indices have now been range bound for several weeks. Distribution on the S&P 500
remains elevated, though two days fall off next week. The Nasdaq continues to be the leading
index, trading just off all-time highs and above its 50-day moving average. Isolated leadership
from multiple technology industry groups have extended their gains, but again, a widening
of breadth is still needed in order for the market to make new highs. The market remains in
a Confirmed Uptrend, despite very little progress on the S&P 500 since the July 8 followthrough
day.
European Focus Long
European markets declined across the board on Friday except
for the U.K., where the pound fell to a 31-year low and rhetoric
became heated over future implications of Brexit. The losses
caused European countries to close down 0.4% on average for the
week. Indices have closed lower in four of the last five weeks. Two
countries, the U.K. (+2%) and Norway (+1.3%), gained more than
1%, while the key markets of France and Germany were mostly
flat.
