European Weekly Summary

Key points from this week’s report:

Please refer to the attached PDF for the full report.

 

  • The Stoxx 600 logged a 4% gain last week bouncing off its March 20th lows. It regained all its moving averages including the 21 and 50-DMA and is now trading 2% off highs and 20% off lows. The index remains however in a Rally attempt as it didn’t record a Follow Through day last week (unlike the Nasdaq) which would have given us more conviction of an established uptrend. Thus, we remain cautious in adding risk as breadth overall remains poor. We recognize however few pockets of strength that are currently working in this environment such as Large cap staples and Tech.
  • All indices participated in the rally and closed in the green, with Retail, Energy, and Capital Equipment leading the gains. On our rotation chart, Transportation, Tech, Retail, Cyclical, and Capital Equipment are showing improvements in their short-term momentum. All other sectors are lagging in their short-term momentum (over four weeks).
  • European Focus List Update:
  • Actionable names include Deutsche Boerse (Xet) (DB1X.DE; DB1 GR), Burckhardt Compression (BCHN.CH; BCHN SW), Straumann Holding (STMN.CH; STMN SW), Nibe Industrier (NIBE.SE; NIBEB SS), Epiroc A (EPIA.SE; EPIA SS), Edenred (EDEN.FR; EDEN FP), Evolution (EVOG.SE; EVO SS), Ferrari (Mil) (RACE.IT; RACE IM), Infineon Technologies (Xet) (IFXX.DE; IFX GR), Wolters Kluwer (WSG.NL; WKL NA), Compass Group (CPG.GB; CPG LN), Edenred (EDEN.FR; EDEN FP), Asml Holding (ASML.NL; ASML NA), and Swedish Orphan Biovitrum (SOBI.SE; SOBI SS).
  • Addition: Deutsche Boerse (Xet) (DB1X.DE)

European Weekly Summary

Key points from this week’s report:

Please refer to the attached PDF for the full report.

 European Equities closed the week in the red, erasing marginal gains on Friday. Indices were flattish amid a slew of earnings during the week. The indices
are still acting constructively near their short-term moving averages, above which they are holding since early January. The Stoxx 600, along with 12 other
indices are in a Confirmed Uptrend and the average distribution count in Europe is at 2.9.
 We recommend an incremental but a selective approach to adding risk. Focus on high relative strength ideas that are part of leading and/or improving
industry groups.
 Energy outperformed last week while Retail, Basic Material, and Cyclical led the underperformance. On our rotation chart, Technology and Health Care
are showing improvements in their short-term momentum. Most other sectors are lagging in their short-term momentum (over four weeks).
o European Focus List Update: Actionable names include Swedish Orphan Biovitrum (SOBI.SE; SOBI SS), Saab B (SAAB.SE; SAABB SS), Ashtead Group
(AHT.GB; AHT LN), Asml Holding (ASML.NL; ASML NA), Bic (BIC.FR; BB:FP), Deutsche Telekom (Xet) (DTEX.DE; DTE GR), Finecobank Spa (FCBK.IT; FBK
IM), Moncler (MONC.IT; MONC IM), and Relx (REL.GB; REL LN)
o Addition: Saab B (SAAB.SE) and Swedish Orphan Biovitrum (SOBI.SE)
o Removal: Aixtron (Xet) (AIXAX.DE) and Terna Energy (TEN.GR)

European Weekly Summary

Key points from this week’s report:

Please refer to the attached PDF for the full report.

 European Equities closed higher for the second consecutive week, retaking key levels. The possibility of the central bank pivoting to a dovish stance led to the
market rally. The Stoxx 600 and 11 other indices are in a Confirmed Uptrend. The indices have acted constructively near their short-term moving averages in
the last few weeks and the distribution count in Europe is low at 2.3.
 Growth sectors led the gains last week. Energy and Utility were down marginally and led the decline. From our rotation chart, sectors such as Cyclical, Financial,
and Basic Material are still showing positive short-term momentum. Staple continues to show a weak trend. Momentum in underperforming Tech and Health
Care seems to be at a turning point for the first time in over five weeks and the short-term momentum has turned more positive.
 European Focus List Update:
o Actionable names include Sartorius Pref. (Xet) (SRT3X.DE; SRT3 GR), Straumann Hldg.( STMN.CH; STMN SW), Asml Holding (ASML.NL; ASML NA),
Epiroc A ( EPIA.SE; EPIA SS), Infineon Techs (IFXX.DE, IFX:GR), Moncler (MONC.IT; MONC IM), Burckhardt Cmpsn.Hldg. (BCHN.CH; BCHN:SW), Epiroc
A (EPIA.SE; EPIA:SS), Bic (BIC.FR; BB:FP), Deutsche Telekom (Xet) (DTEX.DE; DTE GR), Relx (REL.GB; REL LN), and Finecobank Spa (FCBK.IT; FBK IM)
o Addition: Sartorius Pref. (Xet) (SRT3X.DE; SRT3 GR), Straumann Hldg.( STMN.CH; STMN SW),
o Removal: None