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.

 

  • The Stoxx 600 rose 60 bps over the past week, staging a minor recovery from the sharp profit booking a week prior. The index has reclaimed its 200-DMA (1% below) and is now attempting to reclaim the 10-DMA (24 bps above). It faces additional overhead resistance from the declining 21-DMA (159 bps above) and the converging 50-DMA (254 bps above) and 100-DMA (266 bps above). As consumer spending has come under pressure, investors are looking forward to the producer and consumer price data from the U.S., due on Tuesday and Wednesday, to determine the possibility of a rate cut in September.
  • Leadership in the market remains narrow as the number of stocks breaking out continues to plummet, hitting 134 on Friday from mid-July levels of 744 and nearing mid-April lows of 92. The number of bases failing has also surged to 1,340 from July 19 levels of 583. Major markets remain choppy and could run into resistance from declining short- and mid-term moving averages. We recommend investors remain patient and be ready to allocate capital toward defensive stocks in case of a hotter-than-expected CPI print).

Sector Score Cards – Stocks of Interest (Top-rated names with best technical setups – refer to pages 9–20):

  • Consumer Cyclical: Rational (RAAX.DE).
  • Consumer Staple: Essity (ESSI.SE), Premier Food (PFD.GB, FL constituent), Lotus Bakeries (LBAK.BE), Hilton Food (HFG.GB).
  • Financial: Beazley (BEX.GB).
  • Healthcare: H Lundbeck B (HLB.DK, EFL constituent), Vitrolife (VITR.SE, EFL constituent), Camurus (CAMX.SE, EFL constituent), Ambu (AMB.DK, EFL constituent), Orion (ORNB.FI), Cosmo Pharmaceuticals (COPN.CH).

European Focus List Update:

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 markets weakened after a brief rally, on the back of heightened recession fears in U.S. after unemployment rate jumped to three-year high in July amid a slowdown in hiring. France continues to lag its peers and is trading ~15% off highs, below all key logical supports. All indices have accelerated their decline and are breaching key moving averages as the sell-oof intensifies. Look for the indices to hold/retake long term support levels including 200-DMA. Technology and energy lagged the market, while healthcare continues to remain constructive with positive short-term momentum.
  • We remain cautious on the overall market as indices remain vulnerable to the on the downside. We recommend investors reduce positions in names that are breaking below logical levels of support. Increase exposure only to defensive sectors emerging out of proper early-stage bases.
  • Sectors closed negative last week, except utility which 0.3% higher. Technology, Financial and Cyclicals lagged the most, with a decline of ~4.5% each while retail. Health Care, Staple and Energy though posted weekly decline, outperformed the broader market. On our rotation graph, sectoral performance remained mixed. Health Care remained in the best quadrant, exhibiting positive short-term momentum. Financial and Cyclical joined Health Care in the best quadrant with strengthening sector momentum. Utility, Staple, Retail, and Capital Equipment also showed positive short-term momentum. Technology and Energy showed negative short-term momentum.
  • Sector Score Cards – Stocks of Interest (Top-rated names with best technical setups – refer to pages 9–20):
    • Capital Equipment: Viscofan (VIS.ES), Relx (REL.GB; REL:LN).
    • Consumer Staple: Essity (ESSI.SE), Lindt (LISP.CH), Kerry Group (KRZ.IE).
    • Health Care: H Lundbeck B (HLB.DK, EFL constituent), Vitrolife (VITR.SE, EFL constituent), Biotage (BIOT.SE, EFL constituent), Siegfried ‘R’ (SFZN.CH, EFL constituent).
  • European Focus List Update:
    • Addition: None.
    • Removal: None.

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.

 

Last week, the Stoxx 600 closed the week 55 bps higher than the prior week. The index remains in a Downtrend. It closed the week with resistance at the 100-DMA and overhead supply from the near-term moving averages (21-DMA; 12 bps higher, and 50-DMA; 80 bps higher). We expect volatility in upcoming sessions as investors digest earnings against the backdrop of a potential dovish stance from the U.S. and U.K. central banks and continuing weakness in the Chinese economy. If the market reaches a new high in the coming sessions, the index will return to a Confirmed Uptrend. Conversely, a sharp rejection from key moving averages with increasing distribution would signal negative technical action, leading to potential further downside risk.

 

Leadership in European markets has narrowed as the number of breakouts has more than halved in two weeks, while the number of stocks trading near the pivot has declined by more than a third since the start of July. Defensive sectors like Utility, Health Care, and Retail have led gains this week, while Technology and Consumer Discretionary struggled. With short-term momentum shifting toward defensive areas, we recommend investors reduce positions in names breaking below logical levels of support and increase exposure to defensive sectors within constructive markets.

 

Sector Score Cards – Stocks of Interest (Top-rated names with best technical setups – refer to pages 9–20):

  • Capital Equipment: Nexans (NXS.FR), Kronecranes (KCR1X.FI), Relx (REL.GB, FL constituent).
  • Consumer Cyclical: Tyman (TYMN.GB), Adidas (ADSX.DE, FL constituent).
  • Consumer Staple: Premier Food (PFD.GB, FL constituent), Coca-Cola Hbc (CCH.GB).
  • Financial: Banco De Sabadell (BSAB.ES), Quilter (QLT.GB).
  • Healthcare: Lonza (LONN.CH, FL constituent), Biotage (BIOT.SE, FL constituent).
  • Retail: Compass Group (CPG.GB).

 

European Focus List Update:

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.

 

  • Last week, the Stoxx 600 shifted to a downtrend after dropping 268 bps, breaching its 100-DMA due to a slump in semiconductor stocks. The European technology group gapped down 8.2%, in line with the SOXX. ASML (ASML.NL) and VAT Group (VACN.CH) were removed from our European Focus List. We are cautious about the overall market as indices face stiff resistance on the upside. We recommend investors reduce positions in names breaking below logical levels of support and increase exposure to defensive sectors within constructive markets.
  • All sectors closed negatively last week, except for Energy, which remained flat. Technology lagged the most, while Retail, Basic Material, Capital Equipment, and Consumer Cyclical sectors declined by 2% to 2.5%. Despite posting weekly declines, the Staples, Financial, and Transportation sectors outperformed the broader market on a relative basis. Our rotation graph indicates broadly negative sectoral performance, with most sectors showing a deterioration in short-term momentum. Although Technology and Health Care are in the best quadrant, they exhibited negative short-term momentum. Meanwhile, Utilities, Retail, Cyclical, Financial, and Capital Equipment sectors showed positive short-term momentum.
  • Sector Score Cards – Stocks of Interest (Top-rated names with best technical setups – refer to pages 9–20):
  • European Focus List Update:

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 remains in an Uptrend Under Pressure, with six distribution days. Last week, the index gained 145 bps, now trading 119 bps above its 50-day moving average (DMA) and 28 basis points away from its all-time high. It managed to retake its 50-DMA—a key resistance level since mid-June—albeit on low volume. Currently all major markets trade above their key moving averages, except Ireland (24 bps below 100-DMA), Finland (94bps below its 50-DMA) and the U.K (10 bps below) and are starting to trend toward their all-time highs. If the market reaches a new high in the coming sessions, the index will return to a confirmed uptrend. Conversely, a break below the 50-DMA with increasing distribution would signal negative technical action, leading to potential further downside risk.
  • Retail, Health Care, Capital Equipment, and Travel and Leisure stocks led the gain last week, while Technology and Energy lagged. However, on our rotation chart, Technology, Utilities and Retail show improving short-term momentum (four weeks duration). Defensive Staples’ and Health Care’s positive momentum have been fading.
  • Sector Score Cards – Stocks of Interest (Top-rated names with best technical setups – refer to pages 9–20):
    • Basic Resources: Sol (SOL.IT).
    • Capital Equipment: Beijer Ref AB (SKTF.SE), NKT (NKT.DK, EFL constituent), AQ Group (AQ.SE), Relx (REL.GB, EFL constituent).
    • Consumer Cyclical: Technogym (TGYM.IT, EFL constituent), Volution Group (FAN.GB), Lagardère Groupe (MMB.FR), Vivendi (EX@F.FR), Lottomatica (LOTG.IT, FL constituent).
    • Consumer Staple: Premier Food (PFD.GB, FL constituent), Cranswick (CWK.GB).
    • Financial: Lloyds (LLOY.GB), Unipol (UNI.IT).
    • Healthcare: Siegfried ‘R’ (SFZN.CH, EFL constituent), H Lundbeck B (HLB.DK, EFL constituent).
    • Technology: Hemnet (HEMN.SE, EFL constituent), ASML Holding (ASML.NL, EFL constituent), Be Semiconductor (BESI.NL EFL, constituent), Vat Group (VACN.CH, EFL constituent).
    • Energy: Aker Solutions (AKSO.NO).
  • European Focus List Update
    • Additions: Premier Foods (PFD.GB), Lottomatica Group (LOTG.IT).
    • Removals: None.

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.

 

Key points:

  • European markets remained volatile amid election results in major countries. The Stoxx 600 gained ~100 bps and reclaimed its 50-DMA. It remains in an Uptrend Under Pressure with six distribution days. We are cautiously optimistic about the overall market as several indices bounced off their recent lows. After staging a constructive rally, Austria, Belgium, and Germany retook their 50-DMA. Denmark, the Netherlands, and Switzerland remain constructive and are trading above their 50-DMA. The remaining markets are trading below their 50-DMA, with France testing support at the 200-DMA.
  • Sectors closed mostly positive last week, with all sectors posting weekly gains except Health Care. Utility and Transportation led the gains, while Health Care, Staple, Cyclical, and Retail lagged. On our rotation graph, sectoral performance is broadly negative with most sectors showing deterioration in short-term momentum. Defensive sectors, including Consumer Staple and Health Care, took a break after a positive short-term momentum in the last few weeks. Meanwhile, Technology showed positive momentum and joined Health Care in the best quadrant. Underperforming sectors, including Retail and Utility, also showed positive short-term momentum.
  • Sector Score Cards – Stocks of Interest (Top-rated names with best technical setups – refer to pages 9–20):
    • Basic Resources: Centamin (CEY.GB).
    • Capital Equipment: Beijer Ref AB (SKTF.SE), NKT (NKT.DK, EFL constituent), AQ Group (AQ.SE), Relx (REL.GB, EFL constituent), Saab (SAAB.SE, EFL constituent).
    • Consumer Cyclical: Technogym (TGYM.IT, EFL constituent), Cairn Homes (C5H.IE), Volution Group (FAN.GB).
    • Financial: Lloyds (LLOY.GB), Bawag Group (BWGP.AT), Bper Banca (BPE.IT).
    • Healthcare: Ambu (AMB.DK), Siegfried ‘R’ (SFZN.CH, EFL constituent), H Lundbeck B (HLB.DK, EFL constituent).
    • Technology: Hemnet (HEMN.SE, EFL constituent), ASML Holding (ASML.NL, EFL constituent), Be Semiconductor (BESI.NL EFL, constituent), Vat Group (VACN.CH, EFL constituent).
    • Transporation: Wilhs. Wilhelmsen (WWI.NO).
  • European Focus List Update:
    • Addition: None.
    • Removal: Bae Systems (BA.GB), Munters Group (MUGR.SE).