We released our Weekly Global Laggards Report today. Click here to access the report. The stocks highlighted in this
report are laggards relative to their own domestic markets. We recommend that they be under weighted as they may be
vulnerable to further downside risk and underperformance. European names highlighted this week include Gea Group
(Xet) (G1AX.DE; G1A:GR), BMW (BMWX.DE; BMW:GR), and Whitbread (WTB.GB; WTB:LN).
Author: Vidhya M
Won Global View
The U.S. market remains in a Downtrend. The S&P 500 and Nasdaq touched another new low after another volatile session. Both indices are slightly below weak price support along ~3,950 (S&P 500) and ~11,400 (Nasdaq). Upside resistance remains at the rolling 10- DMA (S&P 500: 4,104; Nasdaq: 12,138) and 21-DMA (S&P 500: 4,207; Nasdaq: 12,601).
Won Europe Today
Yesterday,
- European markets closed in positive territory for the second consecutive day. The positive sentiment was driven by
positive news from China with Shanghai reporting a 51% drop in the number of new COVID-19 infections. However,
sentiment could turn sour based on hot inflation data from the U.S. The U.S. CPI recorded an inflation of 8.3% y/y
for April, although slightly lower than the 40-year high of 8.5% in March. Concerns persist on whether the inflation
has peaked and the market would like to see a steady decline in the upcoming months. We recommend that
investors remain cautious as the number of buyable ideas is limited with most stocks still trading in their bases.
With leadership still narrow, it would be prudent to focus on stocks with high relative strength, while reducing risk in
ideas breaking below logical levels of support. - The Stoxx 600 climbed 1.7% led by Oil, Technology, Mining, and Auto sectors, which gained 3.3%, 3.3%, 3.4%, and
3.6%, respectively. Among other major indices, France’s CAC, Germany’s DAX, and the U.K.’s FTSE closed in
positive territory, gaining 2.5% 2.2%, and 1.4%, respectively. - Among the 17 indices we track in Europe, 15 closed in the green, with Switzerland and Denmark closing in the red.
With no changes in market conditions, 16 indices are in a Downtrend and Portugal continues to be in an Uptrend
Under Pressure. The average distribution day count stands at 5.0. - Actionable names in the Focus List include Aker Bp (AKEP.NO; AKRBP:NO), Elisa (ELIS.FI; ELISA:FH),
Glaxosmithkline (GSK.GB; GSK:LN), and Novo Nordisk (NON.DK; NOVOB:DC).
Won Global View
The U.S. market remains in a Downtrend. The S&P 500 closed relatively flat after finding support near ~3,950, while the Nasdaq rallied ~1% after finding support near ~11,550. Both indices still face resistance at the rolling 10-DMA (S&P 500: 4,142; Nasdaq: 12,311) and 21- DMA (S&P 500: 4,234; Nasdaq: 12,725).
Won Europe Today
Yesterday,
- European markets closed in positive territory after closing in the red for four consecutive days. Despite the stocks
rebounding from the selloff, which caused multiple regional markets to reach two-month lows, concerns remain
about a potential recession and the U.S. inflation data release on Wednesday. Volatility of oil prices continues as
opposing forces are at play, with Chinese demand drastically dropping due to lockdowns but Russian supply
continuing to be restricted. We recommend that investors remain cautious while adding names in defensive
sectors with top RS Ratings. - The Stoxx 600 climbed 0.8% led by the Banking, Health Care, and Chemical sectors. Among other major indices,
France’s CAC, Germany’s DAX, and the U.K.’s FTSE closed in positive territory, gaining 0.5%, 1.2%, and 0.4%,
respectively. - Among the 17 indices we track in Europe, 16 closed in the green, with Luxembourg closing in the red. With no
changes in market conditions, 16 indices are in a Downtrend and Portugal continues to be in an Uptrend Under
Pressure. The average distribution day count stands at 5.0. - Actionable names in the Focus List include Aker Bp (AKEP.NO; AKRBP:NO), Elisa (ELIS.FI; ELISA:FH),
Glaxosmithkline (GSK.GB; GSK:LN), and Novo Nordisk (NON.DK; NOVOB:DC).
Won Europe Today
We released our European Weekly Summary yesterday. to access the report. Key points from it include:
- The Stoxx 600 was moved to a Downtrend last week after the index breached its March 16 low. Hence, we
recommend a cautious view on the overall market. The number of buyable ideas is still limited as most stocks are
still trading in their base. - With leadership still narrow, focus on relative strength remains the core strategy in the current environment.
Reduce risk in ideas breaking below logical levels of support. - Rotation Chartion, Consumer Staple, Utility, and Energy showed relative improving short-term momentum (over
four weeks). Financial, Retail, and Consumer Cyclical stocks continue to show weak trends in the short term (over
four weeks). - European Focus List Update:
New additions last week: None
Removals last week: Lonza Group (LONN.CH; LONN:SW), Salmar (SALM.NO; SALM:NO), and AMG
Advd.Metallurgical Group (AMG.NL; AMGUSD:EO).
Won Global View
The U.S. market has shifted back to a Downtrend. The S&P 500 and Nasdaq pulled back another 3–4%, closing near the bottom of the session’s range and at a new 52-week low. We need to see indices consolidate above the recent low for at least three sessions before moving the status to a Rally Attempt.
Won Global View
The U.S. market remains in a Rally Attempt. The S&P 500 declined 0.6% but is still holding above the May 2 intraday low, keeping the attempted rally on this index intact. The Nasdaq, however, recorded a new low and continues to remain in a Downtrend. Though a follow through day (FTD) on the S&P 500 can still result in a market upgrade as early as today, the earliest the Nasdaq can stage a FTD is now Thursday. Both indices face resistance at the sharply rolling 10-DMA (S&P 500: 4,197; Nasdaq: 12,571).
Won Europe Today
On Friday,
- European markets closed in the red for the third consecutive day amid rising concerns surrounding the Fed’s
hawkish policy affecting demand and fears of surging inflation reducing discretionary spending power. Due to the
weakness in European markets and the Fed raising rates, the dollar has strengthened by 3.7% against the Euro in
the past month and reached a record high. Despite Euro zone inflation hitting 7.5% in April, the ECB’s monetary
policies are expected to be dovish compared with the Fed’s. This would lead to dollar reaching parity with the Euro
for the first time since since 2002. We recommend that investors remain cautious while adding names in defensive
sectors with top RS Ratings. - The Stoxx 600 retreated 1.9% on high volume as all sectors, except Oil and Gas, were in negative territory. The
index was shifted to a Downtrend. Among other major indices, France’s CAC and Germany’s DAX were also
shifted to a Downtrend after the indices declined on strong volume. The U.K.’s FTSE continued to be in an Uptrend
Under Pressure and recorded its third distribution day. - Among the 17 indices we track in Europe, 16 closed in the red with only Portugal closing in the green. Due to heavy
distribution, the broader Stoxx 600, France, Germany, Ireland, and Italy were shifted to a Downtrend, while Austria,
Denmark, and Spain were shifted to an Uptrend Under Pressure. Portugal was shifted to a Confirmed Uptrend.
With six indices recording a distribution day each, the average count stands at 5.5. - Actionable names in the Focus List include Aker Bp (AKEP.NO; AKRBP:NO), Elisa (ELIS.FI; ELISA:FH),
Glaxosmithkline (GSK.GB; GSK:LN), Novo Nordisk (NON.DK; NOVOB:DC), and Sonova N (SOON.CH;
SOON:SW).
Won Global View
The U.S. market remains in a Rally Attempt. The S&P 500 declined 3.5%, retracing all of Wednesday’s gains. Despite the sharp decline, the index is still holding above the May 2 intraday low, which keeps the attempted rally on this index intact. The Nasdaq, however, did undercut prior lows after a massive 5% decline, killing the rally attempt on that index. Though a follow-through day (FTD) on the S&P 500 can still result in a market upgrade as early as today, the earliest the Nasdaq can stage a FTD is now next Wednesday. Both indices face resistance at the sharply rolling 10-DMA (S&P 500: 4,234; Nasdaq: 12,724) and 21-DMA (S&P 500: 4,301; Nasdaq: 13,023).
