Author: Tristan d'Aboville

Tristan d’Aboville is an Executive Director, Research Analyst, managing the European Research Product. Mr. d’Aboville has more than 16 years of experience in equity research and sales. Since joining the firm in 2012, he has applied his client-centric style with analysts and portfolio managers, anticipating and exceeding their needs. He writes the well-received weekly European commentary, and follows it with a client conference call to discuss findings. Prior to William O’Neil + Co., Mr. d’Aboville was a top-producing salesperson at Kepler Capital Markets, formerly known as Julius Baer, and at Natixis Bleichroeder, covering European equities for large U.S. institutional clients. He started his career as an equity analyst at Aurel-BGC, later moving to Natixis Bleichroeder, where he became the lead analyst for the European Hotels, Leisure and Catering Sector. He was recognized as a Top Analyst for Predictability & Recommendations by AQ Publications in 2003. Extel named him one of the top three European analysts covering the business services and hotel & leisure industries. Prior to the securities industry, Mr. D’Aboville was an auditor with Arthur Anderson. Mr. d’Aboville earned a Master of Science in Managerial and Financial Economics from ISC Paris School of Management. Later, he studied Global Affairs at New York University. He is a Certified International Investment Analyst (CIIA). A sportif, Mr. d’Aboville enjoys kite surfing, sailing, skiing, tennis, chess, and spending as much of his free time as possible with his wife, young daughter, and son.

European Weekly Summary

Posted on by Tristan d'Aboville

Key points from this week’s report:

Please refer to the attached PDF for the full report.

 

  • European indices continued their decline last week on the back of tepid economic sentiment in the region and tracking the global market weakness. Austria and Germany are the only two major indices trading above their 50-DMA: 3–5% off 52-week highs. Belgium also remained constructive, just 3% away from the 52-week highs, but trading below a flattish 50-DMA. Most indices are trading below their 200-DMA with weak technical setups. Denmark lagged the most, trading 32% off 52-week highs, after Novo Nordisk (NON.DK) dropped 20% following disappointing trial results of its latest weight-loss drug CagriSema. All sectors closed negative with Health Care and Basic Material dropping the most.
  • We are cautious on the European markets as most indices are trading below key moving averages with broken technical profiles. Reduce exposure in ideas breaking support levels. Focus on O’Neil ideas within constructive geographies and emerging out from proper bases or holding short-term support levels.
    • Sectors closed negative last week declining >1.5%. Health Care (-4.4%), Basic Material (-3.9%) and Energy (-3.3%) lagged the most, while the rest declined between 1.5–2.5%. Cyclical (-1.6%), Retail (-1.8%), and Technology (-1.9%) outperformed on a relative basis.
    • On our rotation graph, sectoral performance was mostly negative. Financial and Capital Equipment are the only two sectors in the best quadrant. However, in the last two weeks, both the sectors are exhibiting lethargy. Technology and Utility took a pause while Cyclical and Basic Material exhibited some short-term positive momentum. Retail showed major weakness in the last week and moved out of the best quadrant. Consumer Staple, Transportation, and Health Care also continue to see deterioration in short-term momentum.
  • European Focus List Update:
    • Actionable names include Lottomatica Group (LOTG.IT; LTMC:IM), Pandora (PND.DK; PNDORA:DC), Technogym (TGYM.IT; TGYM:IM), and Schneider Electric (QT@F.FR; SU:FP).
    • Addition: Pandora (PND.DK).
    • Removal: Mips (MIPS.SE).

European Weekly Summary

Posted on by Tristan d'Aboville

Key points from this week’s report:

Please refer to the attached PDF for the full report.

 

  • The Stoxx 600 retreated 77 bps last week as key economic data from the region came in weaker than expected. The U.K.’s GDP decline in October, Germany’s underwhelming trading surplus data, and inflation data from France and Spain continue to concern investors. On Friday, the index ended the week on a negative note, snapping its three-week streak of gains. Year-to-date, it has gained ~8%, well below the 32% gain on the Nasdaq 100 and 28% gain on the S&P 500 , its worst underperformance vs. U.S. indices in more than two decades.
  • The index has been in a long-term consolidation and has significant support at its converging 50-, 21-, and 200-DMA (~513; -59 bps). Currently, leadership remains narrow, as the number of stocks breaking out has fallen back to late October and early November levels. The number of stocks trading near the pivot has fallen for the third consecutive week to the early August levels. Less than half of the names (49%) are trading above their 200-DMA, with nearly a third of them (37%) trading above their 50-DMA.
  • Temenos (TEMN.CH), with a weekly gain of 13.2%, was the leading stock following a broker upgrade, followed by Electrolux (SE@G.SE; +9.9%). Ex-FL name Technip Energies (TECE.FR; 8.5%) followed, after winning the contract for the Net Zero Teesside (NZT Power) project in the U.K. D’leteren Group (DIE.BE; -20%), Ashtead Group (AHT.GB; -18.8%), and Carl Zeiss Meditec (AFXX.DE; -15.1%) were the worst performing laggards.
  • On our rotation charts, Consumer Cyclical has been the bright spot, led by travel and hospitality stocks. Finance continues to perform well, with a significant number of bank stocks breaking out. Health Care fell 1.6% last week and is now in the worst quadrant. Mining stocks were the worst among the laggards, sliding 2.2%.
  • Actionable names on the Focus List include Pko Bank (PKB.PL), Relx (REL.GB), Schneider Electric (QT@F.FR), and Adyen (ADYE.NL).
  • Watch list: Konecranes (KCR1.FI), Mairie (MT.IT), Hermes (RMS.FR), Finecobank (FCBK.IT), Credito Emiliano (CE.IT), Wise (WISE.GB), Brunello Cucinelli (BC.IT), and Pandora (PND.DK).

O’Neil Consumer/Retail Weekly

Posted on by Tristan d'Aboville

Consumer Staples (XLP): The index traded flat over the past one week, and continues to trade above its key moving averages. It sits
2% below the pivot of a stage-one flat base, and has immediate resistance at its October high of $83.2 (+1%). Support is at its 50-
DMA (-1%). The index has underperformed the market in 2024 as demonstrated by its weak near term technical profile

European Weekly Summary

Posted on by Tristan d'Aboville

Key points from this week’s report:

Please refer to the attached PDF for the full report.

 

  • The Stoxx 600 closed a choppy trading week, with a marginal gain of 29 bps. The index has continued to trade sideways for a month as investors monitored the Eurozone inflation data, the political turmoil in France, and concerns about the tariffs by the new U.S. government affecting the auto sector. The index has stabilized, with the number of failed bases declining to 539 this week from 722 last week and 1,216 the week prior. However, leadership still remains narrow as the number of stocks breaking out and trading near the pivot is still near mid-November levels.
  • Mixed sentiments continue to prevail across Europe. We recommend that investors wait on the sidelines during these choppy trading periods as investors are waiting for catalysts to determine a clear market direction. Trim positions in ideas that are breaching their logical levels of support. Focus on names from favorable sectors that are emerging out of proper bases with top O’Neil metrics.
  • Per surveys, Eurozone’s business activity slumped to a 10-month low in November as export orders for both manufacturing and services declined significantly. Money markets now expect a 25 bps rate cut next month and 125 bps of cuts next year, to bring the rate down to 1.75% by the end of 2025. France’s CAC 40 tested its early August lows as the spread between French and German 10-year bond yields hit a 12-year high on Wednesday, with bond risk rising to euro debt crisis levels as the new government is trying to pass a budget that proposes to cut spending and raise taxes.
  • On our sector rotation charts, Capital Equipment and Financial remain the most attractive sectors over the four- and 26-week periods. Consumer Cyclical has also started to gain momentum.
  • Sector Score Cards – Stocks of Interest (Top-rated names with best technical setups – refer to pages 9–20): Alleima (ALLM.SE), Ti Fluid Systems (TIFS.GB), Austevoll Seafood (AUSS.NO), Saipem (SPM.IT), Plus500 (PLUS.GB), Adyen (ADYE.NL), IG Group (IGG.GB), Tesco (TSCO.GB), BT Group (BT,A.GB), Craneware (CRW.GB), and Acea (ACE.IT).
  • European Focus List – Actionable ideas include: Safran (SGM.FR), Bawag Group (BWGP.AT), Schneider Electric (QT@F.FR), Relx (REL.GB), and Talanx Aktgsf (TLXX.DE).

European Weekly Summary

Posted on by Tristan d'Aboville

Key points from this week’s report:

Please refer to the attached PDF for the full report.

 

  • European indices staged a late comeback last week, mostly closing in the green. Norway and the U.K. had a strong up move last week, trading just 1% off their 52-week highs and above all their key moving averages. Germany is also trading constructively above support at its 50-DMA, 2% off its 52-week high. Ireland, Finland, and Italy underperformed, closing with a weekly loss of more than 1%. Mixed sentiments prevail across Europe. The indices may continue to further trade sideways, waiting for the next trigger. Sectoral performances were mostly positive, with Health Care gaining the most. We recommend a selective approach in adding risks as most indices trade below their 50-/200-DMA. Trim ideas that are breaching their key support levels. Focus on quality O’Neil ideas in strong industry groups in constructive geographies and emerging out of proper bases or bouncing off their key support levels.
  • Sectors closed mostly positive, with Health Care (+2.5%) leading the gains, followed by Retail (+1.9%) and Technology (+1.4%). Transportation (-0.2%) and Consumer Cyclical (-0.8%) were the only sectors that closed in the red. Financial closed almost flat, while the rest gained 0.5–1.0%. On our rotation graph, Retail and Transportation show deteriorating short-term momentum after outperforming over 26 weeks, while Capital Equipment witnessed continued improvement in its short-term momentum. While Technology took a pause, Energy and Basic Materials remained in the worst quadrant, with Energy exhibiting positive momentum in the last two weeks. Consumer Staple and Utility witnessed a sharp deterioration in their short-term momentum.

European Weekly Summary

Posted on by Tristan d'Aboville

Key points from this week’s report:

Please refer to the attached PDF for the full report.

 

  • European stocks dropped 69 bps in the past week, marking a fourth consecutive week of decline. Friday’s move concluded a week of choppy trading as investors digested strong earnings from the telecom and energy sector against macroeconomic data such as 0.4% q/q growth in Eurozone GDP and political developments in the U.S. While Germany is expected to be the worst hit country in the Eurozone through proposed tariffs largely affecting the auto sector, pharmaceutical companies such as Zealand Pharma (ZEA.DK, -14.9%), UCB (UCB.BE; -9.3%), Bachem Holding (BANB.CH;-9.2%), and Swedish Orphan (SOBI.SE; -8.4%) also saw a sharp decline during the week due to the proposed appointment of Robert F. Kennedy Jr. to head the U.S. Department of Health and Human Services.
  • The index has been making lower lows and lower highs since falling 1.25% on October 30 with stiff resistance from the declining 10-DMA, 74 bps above. At open on Monday, November 18, the index has already taken out Friday’s lows and volumes on negative days have been high. We recommend investors become highly selective with the markets and sectors to take positions. Ideally, they should wait on the sidelines as markets remain weak on inflation and geopolitical concerns but if positions need to be taken, then we would recommend only leading names from improving sectors and constructive geographies that are breaking out of proper bases behind earnings or strong fundamental factors.
  • We are seeing leadership continue to narrow with the number of stocks breaking out falling to 355 while the stocks trading near the pivot of their bases has now slumped to 2,037, steadily trending lower from the 5,144 level in late August. The number of failed bases is concerning, with the number surging to 1,219, the highest level since early August when the index had dropped down as much as 479.8 (4.63% below).