EUR 97.56 For Business Accounts Only

DBD Strategy Daily - European sector rotation

Though indices are not signalling any specific movements, a lot is happening or trying to happen among sectors. We will comment on US sector in the coming weeks. We underline some more European sectors this week. Autos and Industrials have under-performed in April, and their relative strength are testing major supports. If broken, those will turn the short-term under-performance into a medium-term trend. That would of course confirm that Trump's tariffs will be impacting worldwide economy for the coming year. As a consequence of this possible slow-down, France has outperformed Germany in April. The ratio of the two countries is passing this week a major resistance level that triggers a rounding bottom pattern. Those are two different index families (Stoxx and MSCI), but the signals are coming more or less together. We will know in the first half of May whether those movements will develop with immediate strength or whether they need a little longer. In the shorter term, European banks are back into under-performance thanks to the ECB. This is helping previous laggards (Telecom, Utilities, Retail, etc). Watch Heathcare, it is the only laggard that has not yet surprised...