EUR 42.34 For Business Accounts Only

Vermilion Int'l Compass: Global Equity Strategy

Technology Leading; Sustained New Highs Coming?

Our global intermediate-term outlook remains bullish on MSCI ACWI (in place since our 5/14/25 Compass) after ACWI-US managed to hold at crucial $134 support. With that said, our near-term outlook remains neutral on MSCI ACWI (in place since our 3/17/26 Int'l Macro Vision). Market dynamics have improved considerably throughout April, and while bulls remain firmly in control for as long as the $140.50-$144 gap remains unfilled on ACWI-US, the index is coming into potential resistance at YTD highs ($148.75), with $151-$152 another resistance level. For now we are weighing whether this is a "last hurrah" before rolling over at resistance (or staging a false breakout), or if ACWI-US will sustain a breakout above $148.75.

Market Dynamics Improving. Our concerns have quickly dissipated -- notably global Energy (IXC-US) is at 1.5-month RS lows, defensive Sectors -- Staples (KXI-US) and Utilities (JXI-US) -- are near 2-3-month RS lows, U.S. high yield spreads are back below the key 320bps level, the U.S. dollar (DXY) has rolled over, and interest rate volatility (MOVE index) is back below the 85 level. As long as this list rings true, it supports our constructive outlook... see page 2.
Remain Overweight Emerging Markets, Taiwan, Korea, Spain, Japan, Canada, and Norway. Our current overweights include Emerging Markets (MSCI EM), Taiwan (TAIEX), Korea (KOSPI), Spain (IBEX 35), Japan (TOPIX), Canada (S&P TSX), and Norway (Oslo OBX). We also remain constructive on Europe's EURO STOXX 50 as "must hold" support at 5500 held strong.
Emerging Markets Overview. We remain overweight emerging markets (MSCI EM) since 1/21/26. In the near-term we are neutral as EEM-US approaches YTD highs, but we are still intermediate-term bullish as long as EEM-US is above $55. Top countries continue to be Taiwan and Korea, and we are also overweight Latin America (ILF-US). In terms of Sectors, we remain overweight MSCI EM Technology, Materials, Industrials, and Energy. We are also monitoring for a major RS bottom in MSCI EM Utilities... see page 3.
Actionable Theme: Technology. If this market is indeed breaking out from its multi-month consolidation, Technology is likely to continue leading the way -- add exposure. Materials, Industrials, Financials, and Utilities also remain attractive, while we are waiting for Energy to form higher lows in price and RS... see pages 3-19.