Australia’s ASX All-Ordinaries Index rose 1.67% this week. The index is trading 3.0% above its 40-WMA. It is currently in an Uptrend Under Pressure.
Symbol: FRM.IL
Global Focus Developed Long
Australia’s ASX All-Ordinaries Index rose 1.13% this week. The index is trading 1.48% above its 40-WMA. It is currently in an Uptrend Under Pressure
Global Focus Developed Long
Australia’s ASX All-Ordinaries Index declined 4.69% this week. The index is trading 0.3% above its 40-WMA and is currently in an Uptrend Under Pressure.
Global Consumer Staples Sector
Key points:
Recent weakness in the global markets may bring the long-term lagging Staples sector under the spotlight. Following the downgrade of major markets, including the U.S., Europe ( Stoxx 600 ), and Japan, we are looking at stocks that may relatively outperform in a scenario where weakness persists. We believe investors should pay attention to the technical characteristics of stocks, along with the fundamentals, when managing their positions. In this report, we are presenting a handful of ideas that have very strong defensive characteristics based on O’Neil technical and fundamental metrics.
In the U.S., we still believe that two major themes will play well in the first half of 2018: international exposure & attractive valuation supported by M&A. In addition, earnings season has been encouraging so far.
* Top Picks: Estee Lauder (EL, Focus List, Market Cap $49B) and Monster Beverage Corp. (MNS, Focus List, $36B Market Cap)
* Stocks of interest: Nomad Foods (NOMD, $2.96B Market Cap) and McCormick (MKC, $12.5B Market Cap)
In Europe, historical precedent shows that Consumer Staples displays the best performance among all sectors during corrections. Tobacco offers the best defensive profile.
* We removed Remy Cointreau ( RCO.FR , RCO: FP , $6.24B Market Cap) from our Focus List.
* Top Picks: Frutarom (FRM. IL, FRUT :IT, $5.5B Market Cap) and Kerry Group (KYGA. IE, KYG: ID, $17.9B Market Cap)
* Stock of interest: AAK (AAK.SE, AAK:SS, $3.8B Market Cap )
APAC has not been immune to the recent global sell-off and, thus, short-term momentum in Staples has also been accelerating. We believe that the Japanese cosmetics group remains an interesting area of growth, driven by the surge in export volumes of Japan cosmetics to other Asian region
* Top Picks: Pigeon ( PIGC.JP , 7956:JP, Focus List, $4.6B Market Cap)
* Stock of interest: Kose ( OSEC.JP, 4922:JP, $10B Market Cap)
Market View
Market Overview
The U.S. market has been downgraded to Uptrend Under Pressure. This week, the S&P 500 and Nasdaq broke below their respective 21-DMAs as distribution increased. The majority of leading ideas have pulled back off ex-tended highs and a handful have broken below their respective 50-DMAs. We recommend lightening up in both extended ideas and ideas that have broken below short-term levels of support. Going forward, we will be look-ing for the market to stabilize and bounce from key moving average and/or price support before we recom-mend buying. The next level of support is the rising 50-DMA, which is 2-3% below current levels.
Stocks on our U.S. Focus List: Current Sentiment
Our USFL of 75 ideas (five removals) lost 3.8% on average this week, in-line with the S&P 500 (-3.8%), but un-derperforming the Nasdaq (-3.5%).
By Sector
Over the last five sessions, all sectors have declined at least 2%. Retail, Financial, and Consumer ideas have held up the best, while Energy ideas have come under pressure. Retail outperformance has come largely from AMZN, while Consumer Cyclical has been aided by NFLX. EL, MNST, and BUFF are holding up well within Con-sumer Staple. Within Financial, Banks and Brokers continue to act well. ZION, WAL, SIVB, MS, and SCHW con-tinue to show constructive technical action. Conversely, Energy ideas COG and CDEV broke short-term individu-al support levels.
Global Focus Developed Long
Australia’s ASX All-Ordinaries Index surged 1.06% this week. The index is trading 5.40% above its 40-WMA. It is in a Confirmed Uptrend.
Global Focus Developed Long
Australia’s ASX All-Ordinaries Index increased 0.74% this week. The index is trading 4.41% above its 40-WMA. It is in a Confirmed Uptrend.
Global Focus Developed Long
Australia’s ASX All-Ordinaries Index declined 0.93% this week. The index is trading 3.75% above its 40-WMA and is in a Confirmed Uptrend.
Global Focus Developed Long
Australia’s ASX All-Ordinaries Index fell 0.85% this week. The index is trading 4.82% above its 40-WMA and at 52-week highs. It is in a Confirmed Uptrend.
Global Focus Developed Long
Australia’s ASX All-Ordinaries Index was up 1.01% this week. The index is trading 5.85% above its 40-WMA at a 52-week high. It is in a Confirmed Uptrend.
