Report
Dave Nicoski ...
  • Ross LaDuke
EUR 47.97 For Business Accounts Only

Vermilion Int'l Compass: Global Equity Strategy

Our outlook remains bullish on global equities (MSCI ACWI). We discussed in our January 9, 2025 Int'l Compass how we viewed the pullback as a buying opportunity and we were watching for $116-$117 support to hold on ACWI-US. $116 support held perfectly, and now both ACWI-US and the S&P 500 are coiling just below all-time highs, likely setting up for major breakouts. Germany continues to lead Europe higher, and the EURO STOXX 50 has not looked back following the major 9-month base breakout above 5000-5120. Japan's TOPIX could very well be next to break out as it consolidates below 2740-2820 resistance. As long as ACWI-US is above $116, the S&P 500 is above 5650-5670, and the EURO STOXX 50 is above 5030, we see every reason to remain bullish.

Remain Overweight the U.S. and Germany. Our two country overweights include the U.S. (S&P 500) and Germany (DAX).
Market Dynamics Remain Risk-On, Improvement Continues. We continue to see local tops that could very well end up being major tops on the U.S. dollar (DXY) and 10-year Treasury yield. A break below $107-$108 on DXY and 4.5% on the 10-year Treasury yield would signal a longer-term top is in, which would be very bullish for global equities. Many more countries/indexes display bullish multi-month price inflections (MSCI Emerging Markets, Switzerland, Netherlands, and Mexico), which is in addition to the many that we highlighted in our latest January 30 Int'l Compass (MSCI ACWI ex-US, EAFE, France, Hong Kong, Ireland, Italy, UK, Canada, Czech Republic, Poland, and Korea). Of course, many other market dynamics which remain risk-on (high yield spreads, crude oil prices remain in downtrends, cyclical/growth Sectors outperforming, low interest rate volatility, etc.). The evidence is overwhelming, so it is not hard for us to remain bullish... see charts below and page 2.
Actionable Themes: Technology, Services, Communications, Industrials, Gold Miners, and Financials. Our favorite Sectors have not changed for months, and include Technology, Services, Communications, Financials, and Consumer Discretionary. The vast majority of names we have been recommending remain attractive, but today we attempt to focus more on other names we have not recommended before, particularly within China/Hong Kong. We also highlight our favorite names within Industrials and Gold Miners; both areas are starting to show leadership qualities... see pages 3-21.
Underlyings
AUTEL INTELLIGENT TECHNOLOGY CORP

Autel Intelligent Technology Corp Ltd. Autel Intelligent Technology Corp., Ltd. is a China-based company mainly engaged in automotive intelligent business. The Company's business includes research, development, manufacturing, sales and service of automotive intelligent diagnostics, detection and analysis systems and automotive electronic components. Its main products include comprehensive automotive diagnostic products, Tire Pressure Monitoring System (TPMS) series products, Advanced Driving Assistant System (ADAS) series products and other products, as well as offering in various products Car intelligent repair cloud service. The Company's products are mainly sold to more than 50 countries and regions including the United States, Germany, the United Kingdom, and Australia.

Boruta Zachem SA

Boruta Zachem SA. Boruta Zachem SA, located in Bydgoszcz, Poland, manufactures dyestuffs and pigments. It also produces biosurfactants used in chemical and cosmetics industry as well as provides research and development of innovative chemical solutions.

Mycronic AB

Micronic AB provides production solutions for manufacturing electronics products. Co. has two business areas. Surface Mount Technology provides production equipment and solutions for mounting components on circuit boards, an indispensable part in electronics products. Co. provides surface mount machines, software, automated storage solutions and peripheral equipment that handle all types of components and circuit boards. Pattern Generators provides production equipment and solutions for manufacturing of electronics products. Co. provides two types of pattern generators: mask writers for the manufacturing of photomasks and direct writers for the manufacturing of substrates.

SHOPIFY INC.

Shopify provides a cloud-based commerce platform designed for small and medium-sized businesses. Merchants use its software to run their business across all of their sales channels, including web, tablet and mobile storefronts, social media storefronts, and brick-and-mortar and pop-up shops. Co. provides a platform for merchants to create an omni-channel experience that helps showcase the merchant's brand and grow its business. Co.'s platform provides merchants with a single view of their business and customers across all of their sales channels and enables them to manage products and inventory, process orders and payments, build customer relationships and leverage analytics and reporting.

Temenos AG

Temenos is engaged in the development, marketing and sale of banking software systems. Co. is also involved in supporting the implementation of the systems at various client locations around the world as well as in offering help desk support services to existing users of TEMENOS software systems. Co.'s client base consists of banking and other financial services institutions. Co.'s segments include: Product, which is engaged in marketing, licensing and maintaining Co.'s software solutions, including software development fees for requested functionality, as well as providing hosting arrangements; and Services, which represents various implementation services such as consulting and training.

Will Semiconductor Ltd. Class A

Will Semiconductor Co., Ltd. Shanghai is a China-based company principally engaged in the research and development, design and sales of semiconductor devices. The Company's main businesses include the research and development and design of semiconductors, as well as the distribution of semiconductor products. The Company's products mainly include semiconductor discrete devices, power management integrated circuits (IC), transient voltage suppressers (TVS), metal-oxide-semiconductor field-effect transistors (MOSFET), schottky diodes, as well as the passive components such as resistances, capacitances and inductances. The Company's products are primarily applied in mobile communication, vehicle-mounted electronics, security, internet communication and household appliances, among others.

Provider
Vermilion Research
Vermilion Research

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.

Analysts
Dave Nicoski

Ross LaDuke

Other Reports on these Companies
Other Reports from Vermilion Research

ResearchPool Subscriptions

Get the most out of your insights

Get in touch