The CSI 300 rose 2.26% on lower volume and remains in a Confirmed Uptrend with the number of distribution days decreasing to four. The index rose for four consecutive sessions and broke above its 21-DMA (4,981, -0.8%) Thursday
Symbol: BPC.BR
Market View
The U.S. market remains in a Confirmed Uptrend. The S&P 500 and Nasdaq made new all-time highs this
week, continuing to trend higher off 10- and 21-DMA (S&P 500: 3,652; Nasdaq: 12,351) support. The distribu-
tion day count is mixed at six and two, respectively, though both have avoided clustering into further expiration
next week.
Won Global View
The U.S. market remains in a Confirmed Uptrend. The S&P 500 and Nasdaq continue to grind higher above support at the rising 10-DMA (S&P 500: 3,673; Nasdaq: 12,453), followed by the 21-DMA (S&P 500: 3,645; Nasdaq: 12,254). The distribution day count stands at six and three, respectively, with one day expiring on each after the close.
LATAM Weekly Summary
Key points from this week’s report
- Brazil’s Bovespa benchmark rallied 4.3% last week, registering its fourth consecutive weekly gain. It remains in a Confirmed Uptrend with three distribution days. The benchmark is now back to pre-COVID levels.
- Mexico’s benchmark fell 0.6% last week, but continues to trade above its key levels of support. The index remains in a Confirmed Uptrend.
- The total number of ideas on the LATAM Focus List remains at seven. Interconexion Electrica ( ISA.CO; ISA:CB ) remains actionable.
- Stocks of interest include Hapvida ( HAP.BR; HAPV3:BZ ), Raia Drogasil ( DR3.BR; RADL3:BZ ), PetroRio ( HRT.BR; PRIO3:BZ ), Banco Inter ( IIP.BR; BIDI4:BZ ), GOL ( GI4.BR; GOLL4:BZ ), Vivara ( VPO.BR ), Grupo Bimbo ( BI2.MX; BIMBOA:MF ), Becle ( BEC.MX; CUERVO*:MF ), and Grupo Mexico ( GME.MX; GMEXICOB:MM ). Additional names are listed on page 3.
LATAM Weekly Summary
Key points from this week’s report:
Please refer to the attached PDF for the full report.
- Brazil’s Bovespa index gained 3.5% last week. It was moved to a Rally Attempt from a Downtrend as the benchmark bounced off support near the 200-DMA.
- Mexico’s benchmark index gained 6.9% last week and was upgraded to a Confirmed Uptrend from a Rally Attempt. We note that the benchmark remains below the 200-DMA. A sustained move above this resistance level would be bullish.
- The number of Focus List recommendations is down to nine. We removed Banco Btg Pactual (BPC.BR; BPAC11 BZ) and Banco Do Brasil (IO3.BR; BBAS3 BZ) last week.
- Off the Focus List, stocks of interest include Kimberly Clark Mexico (KCA.MX; KIMBERA MF), Walmart de Mexico (WAV.MX; WALMEX* MF), Fibra Uno (FUN.MX; FUNO11 MF), Fleury (FLE.BR; FLRY3 BZ), and Petrobras Distribuidora (PRB.BR; BRDT BZ).
Market View
The U.S. market is in an Uptrend Under Pressure. The S&P 500 and Nasdaq are consolidating below their respective 50-DMA after advancing ~2.8% this week. Despite the move higher, we maintain a cautious outlook as
the 50-DMA has consistently been a level of resistance over the last four weeks. The distribution day count
stands at four days on the Nasdaq and three days on the S&P 500
Global Focus Emerging
The CSI 300 dropped 0.6% for the week on slightly lower volume. The market remains in a Confirmed Uptrend with one distribution day. The Sino-U.S. trade war escalated this week and, though negotiations have resumed, the uncertainty still impacted market sentiment. We will be watching closely for trade news this weekend since new tariffs take effect September 1. We expect the CSI to continue consolidating around 50- and 100-DMA support; next support is at ~3,720. Short-term resistance lies at the upper gap of ~3,860. New policies to boost consumption, as well as the upcoming Mid-Autumn Festival and 70th National Day celebrations, are positive factors for the market.
Won Global View
The U.S. market is in an Uptrend Under Pressure. The S&P 500 and Nasdaq bounced higher on below average volume after last week’s broad-based selloff. The distribution day count remains at three days on the Nasdaq and two on the S&P 500. The next level of support is the rising 200-DMA (S&P 500: 2,803; Nasdaq: 7,594).
Global Focus Emerging
The CSI 300 rose 2.97% on increased volume for the week. We upgraded the market condition to a Confirmed Uptrend on Monday after the index surged 2.17% on the news of interest rate reform and the plan to build Shenzhen into socialist demonstration area. The CSI 300 regained its 50- DMA and 100-DMA, which serve as the next levels of support. We see immediate resistance near 3,850 and the next resistance near 3,900.
Global Focus Emerging
The CSI 300 rose 2% for the week and we moved the market to Rally Attempt Monday. The index continued consolidating above previous lows of ~3,575, which could serve as support in the near term. The CSI 300 is ~4.6% above its 200-DMA and the 50- DMA may be the next resistance. U.S. President Trump said he would postpone recent 10% tariffs on Chinese imports, boosting sentiment. However, the yield curve inversion between U.S. twoyear and ten-year notes for the first time since 2007 led to higher volatility. China’s disappointing July economic data increased concerns
