Vermilion Int'l Compass: Global Equity Strategy
Shift Toward Defensives as ACWI-US Makes Push for $93The MSCI ACWI (ACWI-US), ACWI ex-US (ACWX-US), EAFE (EFA-US), and EM (EEM-US) are all reversing topside their 2-month downtrends. Despite this being a bullish short-term development, we still expect $93 to cap upside on the ACWI-US, leaving about 4-5% upside from here... see charts below. As a result, we would use any further strength as an opportunity to get more defensive. Important downside levels on ACWI-US continue to be $86, $84, and $75-77. The STOXX Europe 50 has reclaimed the 3840 level, and we continue to recommend an overweight to Europe.
EM Strategy Recap. A quick recap of our 3/27/23 EM Strategy report: (1) We are buyers of MSCI EM (EEM-US) following the 2-month downtrend reversal. (2) We noted many attractive buys within China (MSCI China/Shanghai Comp.) and Hong Kong (Hang Seng). (3) We upgraded Taiwan (TAIEX) to overweight. In today's report we highlight several attractive buys within China and Hong Kong... see page 2.
Japan. Japan's TOPIX and TOPIX Small indexes have been making higher lows for over a year now, and we believe RS is likely forming a long-term uptrend -- add exposure. Overweight small-caps which continue to lead within Japan. We expect support to be at the 200-day MAs on the TOPIX and TOPIX Small... see page 3.
Actionable Stocks: REA Group (REA-AU) and GFL Environmental (GFL-CA). REA Group displays a base breakout, while GFL Environmental, a stock we have recommended since January 2023, displays an attractive bottoming pattern -- buy... see page 4.
Actionable Themes: Consumer Staples, Health Care, and Gold Miners. As global equities (MSCI ACWI) rally into logical resistance, we recommend rotating into defensive areas including Consumer Staples, Health Care, and Gold Miners. We highlight our favorite names to buy within these areas... see pages 5-20.
Nan Nan Resources Enterprise is an investment holding company. Co. is principally engaged in mining and sales of coal. As of Mar. 31, 2014, Co. owned mining rights Kaiyuan Open Pit Coal Mine, which has estimated remaining coal reserve of approx. 13,960,000 tonnes, and an exploration right of Zexu Open Pit Coal Mine, which has estimated measured coal resources and estimated indicated coal resources of 56,580,000 tonnes and 62,800,000 tonnes respectively.
Tractor Supply is a rural lifestyle retailer. The company is focused on supplying the needs of recreational farmers, ranchers and all those who enjoy living the rural lifestyle, as well as tradesmen and small businesses. The company operates retail stores under the names Tractor Supply Company, Del's Feed & Farm Supply, and Petsense and operates websites under the names TractorSupply.com and Petsense.com. The company's selection of merchandise is comprised of the following main product categories: equine, livestock, pet, and small animal products; hardware, truck, towing, and tool products; seasonal products; work/recreational clothing and footwear; and maintenance products for agricultural and rural use.
Vermilion Research delivers timely, actionable, and unique research inputs to professional investors. Our research strategists highlight securities which we believe are at major inflection points, based on our various proprietary technical indicators, and offer asymmetric risk/return profiles. We believe our research methodology, which is not limited by industry sector or market capitalization, enables us to deliver superior investment recommendations.
Our process begins by organizing all actively traded stocks into coherent sectors, then into logical industry groups. We then apply our proprietary relative strength tools to identify developing price trends. Once attractive trends are identified within a selected sectors or groups, we screen for individual stocks which we believe offer the best risk/reward profile. Vermilion offers U.S. and global equity market research products. Vermilion’s research team, which has received numerous awards and accolades, has a combined 70 year of experience in the analysis of investment securities.
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