Dave Nicoski ...
  • Ross LaDuke
EUR 220.43 For Business Accounts Only

Vermilion Int'l Compass: Global Equity Strategy

Fed cut, now what?

The Fed's 25 bps cut and Powell's evasiveness in committing to a new easing cycle was seen as more hawkish than expected. In our opinion Powell was essentially saying the Fed will act as appropriate moving forward, and we can't blame him considering this was largely an “insurance cut” as opposed to a rescue attempt to avoid recession, and we may or may not need additional insurance moving forward. Overall the weight of the evidence supports further consolidation - i.e., no breakouts for now - on the broad global indexes (MSCI ACWI, ACWI ex-US, EAFE, and EM), and considering overhead resistance and no real change to economic and market signals, we remain neutral.

• US dollar (DXY) and euro. The DXY is breaking to new highs and the euro (EUR/USD) is breaking to new lows, something that we previously stated is likely to pose an uphill battle for international equities - at least initially. With all that said, both currencies could be poised for near-term reversals based on the charts... see page 2.

• Actionable Themes: Technology and Services Sectors. With further consolidation likely for the broad indexes, we want to stick with areas of the market that have shown an ability to outperform despite the broader consolidation. For that we are returning to Technology and Services. As we have highlighted for several months, select Japanese equities continue to show signs of bottoming, particularly small- and mid-caps within Technology -- add exposure. Roughly half of today's individual stock recommendations are domiciled in Japan... see page 3.

• Actionable Themes: Russia and India. Russia's RTS and India's SENSEX exhibit attractive price and RS pullback opportunities -- add exposure. We highlight several stocks within these countries that are worth buying at current levels... see page 4.
Advantech Co. Ltd.

Advantech is engaged in manufacture and sale of embedded personal computers (PCs), industrial automation products, industrial computers and panel PCs. Other activities include the provision of consultancy and investment services.

ASML Holding N.V.

ASML Holding provides lithography systems for the semiconductor industry, manufacturing machines that are used in the production of integrated circuits or chips. Co. develops, produces, markets, sells and services advanced semiconductor equipment systems exclusively consisting of lithography systems. Co. sells its products to micro-processor manufacturers and Foundries, NAND-Flash memory and DRAM memory chipmakers. Co.'s products line includes the following: PAS 5000 lithography systems, which Co. no longer manufactures but continues to refurbish; PAS 5500 products; TWINSCAN DUV systems and TWINSCAN EUV systems based on a new platform utilizing the concepts of the TWINSCAN platform.

Aveva Group PLC

Aveva Group is a holding company. Through its subsidiaries, Co. is engaged in the licensing of the rights to use its software products directly to end users and to a lesser extent indirectly through resellers. Co.'s services consist primarily of consultancy, implementation services and training, and are performed under separate service arrangements. Co.'s products are most applicable in industries that include Oil and Gas, Marine, Power, Petrochemical and Chemical, and other markets such as AEC Fabrication, Paper and Pulp, Mining and Pharmaceuticals.

Elis SA

Elis is a multi-service group in the rental, laundry and maintenance of textile, hygiene and well-being items in Europe and Latin America. Co. serves hundreds of thousands of customers of all sizes, belonging to various professional customer segments: hospitality, healthcare, industry, trade and services. Co. also has a manufacturing business carried out by two entities, Le Jacquard FranASSais and Kennedy Hygiene Products which together form one of the company's operating segments.

Espec Corp.

ESPEC is mainly engaged in the environmental testing business. Co. is engaged in three business segments. The Equipment segment provides environmental testing equipment, flat panel display (FPD) devices and semiconductor devices. The Service segment provides after-sale services, engineering services and contracted testing services; the rental and resale of environmental testing equipment, as well as the proofreading services of measuring equipment. The Others segment is involved in the environmental engineering business and other new businesses.


Fuji Soft is mainly engaged in the development of software and the provision of information services. Along with its affiliates, Co. operates in two principal business segments. The System Integration ("SI") segment is engaged in the development of embedded and control software for machine control and auto-related projects and operation software for various fields, and the provision of product services as well as the system construction, maintenance and operation services. The Facility segment is engaged in the leasing of office buildings. In addition, Co. is engaged in the data entry business, the contact center business and the regeneration medicine business.


GREE is mainly engaged in the operation of social networking service ("SNS") under the name "GREE." "GREE" provides various functions for information offering, such as profile page, diary/comments, communities, photos, mail and others for personal computer ("PC") users and mobile users, including smart phones. Co. is also involved in the development and provision of "GREE" with other contents, such as games under the names "Tsuri-Star (Fishing Star)," "Odoriko Clinoppe," "Driland," "Pirate Kingdom Columbus," and others; fortune-telling services under the name "GREE-Ura;" dictionary under the name "GREE-Jisho;" questions and answers ("Q&A") services under the name "GREE-Q;" news; and others.

HDFC Life Insurance Company

HDFC Life Insurance Company Ltd Formerly known as Hdfc Standard Life Insurance Company Ltd. HDFC Life Insurance Company Ltd, formerly HDFC Standard Life Insurance Company Limited, is a life insurance company. The Company provides various individual and group insurance solutions across India. It offers a range of life insurance plans, such as term insurance plan, women's plan, health insurance plans, child education plans, unit linked insurance plans (ULIPs), and savings and investment plans. It operates through 13 segments: Participating Life (Individual & Group), Participating Pension (Individual & Group), Participating Pension Group Variable, Non Participating Life (Individual & Group), Non Participating Pension (Individual & Group), Non Participating Life Group Variable, Non Participating Pension Group Variable, Non Participating - Annuity, Non Participating - Health, Unit Linked - Individual Life, Unit Linked - Individual Pension, Unit Linked - Group Life and Unit Linked - Group Pension. It has approximately 410 branches in over 900 cities and towns in India.

Hibiya Engineering Ltd.

Hibiya Engineering is mainly engaged in provision of a comprehensive range of facilities engineering products and services. Co. operates in three business segments; construction, equipment sales, and equipment manufacturing. Co. is engaged in the planning, design and construction of air-conditioning, plumbing and sanitation, electrical systems, data management, communications and other applications; the sale of equipment used for construction; and the manufacture and sale of facility equipment. Co. is also engaged in the sale, brokerage, rental and management of real estate; and the provision of temporary staffing services.


ICICI Bank Limited is a banking company. The Bank is engaged in providing a range of banking and financial services, including commercial banking, retail banking, project and corporate finance, working capital finance, insurance, venture capital and private equity, investment banking, broking and treasury products and services. The Bank's business segments are Retail banking, Wholesale banking, Treasury, Other banking, Life insurance, General insurance and Others. It has a network of approximately 18,210 branches and automated teller machines (ATMs). The Bank has approximately 110 Touch Banking branches across over 30 cities. Its international banking is focused on providing solutions for the international banking requirements of its Indian corporate clients and leveraging economic corridors between India and the rest of the world. The Bank caters to the financial needs of women entrepreneurs through its Self-Help Group (SHG) program as a part of its microfinance initiatives.

ICICI Prudential Life Insurance

Icici Prudential Life Insurance Company Ltd. ICICI Prudential Life Insurance Company Limited is a life insurance company, which is a joint venture between ICICI Bank Limited and Prudential Corporation Holdings Limited. The Company provides life insurance, pensions and health insurance to individuals and groups. It conducts business in participating, non-participating and unit linked lines of businesses. Its segments include Par Life, Par Pension, Non Par, Annuity Non Par, Health, Linked Life, Linked Pension, Linked Health and Linked Group. It offers term plans, such as ICICI Pru iProtect Smart; unit linked insurance plans (ULIPs), such as ICICI Pru Wealth Builder II and ICICI Pru Elite Life II; child education insurance plans, such as ICICI Prudential SmartKid with Smart Life; retirement plans, such as ICICI Pru Easy Retirement; traditional savings/money back plans, such as ICICI Pru Cash Advantage and ICICI Pru Savings Suraksha, and Health insurance. It offers products on retail, mortgage and group platforms.

Ipca Laboratories

Ipca Laboratories is engaged in the manufacture, sale and export of pharmaceuticals and pharmaceutical formulations in the form of tablets and capsules, orals and liquids, injectables, basic drugs and intermediates, and psyllium husk. As of Mar 31 2003, Co. operated 4 manufacturing facilities in Ratlam, Indore, Kandla and Athal. Co. also maintained a corporate office, an international division, and a research and development center in Mumbai.

IR Japan Holdings

IR Japan Holdings Ltd is engaged in the operation and management of subsidiaries and the provision of other related business. The Company's subsidiaries mainly provide consulting service, specialized in investor relations (IR) and shareholder relations (SR) services.

Itochu Techno Solutions

ITOCHU Techno-Solutions is an information technology ("IT") solution services company based in Japan. Along with its affiliates, Co. operates in five principal business segments: distribution & enterprise, telecommunications, public & regional, finance & social infrastructure, and IT services. Co. is engaged in the comprehensive proposal and sales activities, including consulting to system design, construction, maintenance and operation services; and the joint proposal and procurement focusing on IT infrastructure outsourcing and maintenance and operations. In addition, Co., through its subsidiaries, is engaged in the product procurement, the sale of software, and others.

Japan Elevator Service Holdings

Japan Elevator Service Holdings Co Ltd. JAPAN ELEVATOR SERVICE HOLDINGS CO.,LTD. is a Japan-based holding company. The Company is primarily engaged in the maintenance business which provides the maintenance and inspection service for elevators and escalators, as well as the renewal service for elevators. The Company operates three kind of business. The Maintenance and Inspection business is involved in the provision of maintenance, inspection, replace and repair services for the engine performance and the operation safety of elevators and escalators. The Renewal business is involved in the provision of a full range of main components' replacing service, the removal service of products already in the field, as well as the new setting service for elevators which are installed 20 years ago. The Others business is involved in the sale of parts for elevator's maintenance. The Company has ten subsidiaries and two associated companies.

Meitec Corp.

Meitec is mainly engaged in the provision of temporary and full-time staffing and engineering outsourcing services. Along with its subsidiaries, Co. operates in three business segments. The Temporary Staffing segment is engaged in the provision of temporary staffing services mainly focusing on the engineers staffing business in the manufacturing industry. The Recruiting & Placement segment is engaged in the provision of job placement and information portal site businesses for engineers. The Engineering Solutions segment is engaged in the provision of technology support services for printed-circuit board design.

Miroku Jyoho Service

Miroku Jyoho Service is an information technology (IT) company. Co. is engaged in the development and sale of package software for business use, such as business operations, tax accounts, marketing, payroll and human resources, as well as the provision of consulting services for the installation and operation of systems. Co. is also engaged in the sale of computer hardware, such as general servers, personal computers, peripheral equipment and supply products, as well as the provision of software and hardware maintenance services. Co., through its subsidiary, is engaged in the preliminary kitting and installation of servers.


MMC Norilsk Nickel PJSC is a global producer of nickel, palladium, platinum and copper. Co. also produces by-products, such as cobalt, chromium, rhodium, silver, gold, iridium, ruthenium, selenium, tellurium and sulfur. Co. is involved in prospecting, exploration, extraction, refining and metallurgical processing of minerals, as well as in production, marketing and sale of base and precious metals. Co.'s production facilities are located in five countries: Russia, Australia, Botswana, Finland, and South Africa. Co.'s production units are integrated and include: the Polar Division (the Taimyr Peninsula); and the Kola Mining and Metallurgical Company (Kola MMC or the Kola Peninsula).

Novorossiysk Commercial Sea Port

Novorossiysk Commercial Sea Port Pubjt Stock Co. is an operator of marine port terminals. Co. provides a range of stevedoring services for transshipment of all types of cargo, including liquid, bulk, general cargo and container cargo, and also provides additional port services and auxiliary port fleet services. Co.'s ports are located at the crossroads of international transport corridors that connect Russia to countries on the Mediterranean Sea, the Middle East, North Africa, Southeast Asia and North and South America. Co.'s main customers are several industrial companies in the resource and manufacturing sectors.


People is engaged in delivering employee group benefit consulting, pension consulting and third party benefits administration services, as well as, recruiting services, strategic human resource (HR) consulting and career management services to help companies recruit, retain and reward employees.

REA Group

REA Group is a multinational digital advertising company, based in Australia, that specializes in property. Co. provides a range of premium property listings as well as products for markets adjacent to property such as utility connections, and advertising solutions for property developers and display media advertisers. Co. operates residential, commercial and share property websites,, and, Chinese property site, and iProperty Group which owns a number of property portals in Asia. Co. also maintains significant shareholdings in Move, Inc. in the United States and PropTiger in India.

Recruit Holdings

Recruit Holdings is a holding company. Through its affiliates, Co. operates in four business segments: marketing media, HR media, staffing, and other. Marketing Media segment is engaged in the provision of information on housing, bridal, post-secondary education for high school students, automobiles, lodging accommodation, restaurants, and beauty salons. HR Media segment is engaged in the provision of services that offer employment information to job seekers both in Japan and overseas. Staffing segment is engaged in the provision of staffing services in Japan and overseas. Other segment is engaged in the planning, operation, outsourcing, and other of digital content services.

Ryoyo Electro Corp.

Ryoyo Electro and its affiliates are mainly engaged in the wholesale distribution of domestic and overseas made semiconductors and system information equipment. Products Co. handles include semiconductors and integrated circuit (MPU, memory, system LSI, ASIC and ASSP); computer systems and peripheral servers, storages, LAN Systems, workstations, PCs, monitors, printers and projectors; electronic devices (LCD and contact image sensors); and software (windows, office, UNIX-related software, networking software, backup software, security-related software and imaging software). In addition, Co. provides liquid crystal panels, liquid crystal display modules, and contact image sensors.

Sino-American Silicon Products Inc.

Sino-American Silicon Products Inc. is a Taiwan-based company principally engaged in the research, development, design, manufacture and distribution of semiconductor silicon wafer materials and related components. The Company's principal products include solar silicon ingots, solar silicon wafers, semiconductor ingots, semiconductor wafers, solar cells and solar module products. The Company mainly operates through two business segments: semiconductor business segment and solar business segment. The Company is also engaged in the provision of related technology, management and consultancy services. The Company mainly operates its business in Taiwan, the rest of Asia and the Americas.

Sophos Group

Sophos Group is a global provider of cloud-enabled enduser and network security solutions company. Co. provides customer with end-to-end protection against known and unknown IT security threats, through products that are easy to installs, configures, updates and maintains.


Strike Company Ltd. Strike Company, Limited is a Japan-based company mainly engaged in mergers and acquisitions (M&A) brokerage business. Its main business includes M&A brokerage business, including corporate mergers, acquisitions and capital tie-ups between companies. It is also engaged in auxiliary business, such as advisory services, support for execution of M & A, due diligence business, corporate evaluation services and consulting services, among others.

Tokyo Electron Ltd.

Tokyo Electron is a supplier of semiconductor production equipment ("SPE") and flat panel display ("FPD") selling through global network that spans Japan, the U.S., Europe and Asia. Co.'s principal products are coater/developers, plasma etch systems, thermal processing systems, single wafer deposition systems, cleaning systems (auto wet station, single wafer cleaning system, pre-clean system and scrubber system), wafer prober, FPD coater/developers and FPD plasma etch/ash systems. In addition, Co., through its subsidiaries, is engaged in the provision of transportation services, insurance services, as well as the support services for Co.'s photovoltaic cell ("PV") production equipment.

Tower Semiconductor Ltd.

Tower Semiconductor is a pure-play independent specialty foundry dedicated to the manufacturing of semiconductors. Typically, pure-play foundries do not offer products of their own, but focus on producing integrated circuits based on the design specifications of their customers. Co. manufactures semiconductors using advanced production processes for Co.'s customers primarily based on third party designs and Co.'s own proprietary designs. Co. offers the manufacture of integrated circuits with geometries ranging from 1.0 to 45-nanometers. Co. also provides design support and complementary technical services.


ULVAC is engaged in the manufacture and sale of vacuum systems and equipment. The Vacuum Machinery segment provides sputtering systems, CVD systems, vacuum evaporation systems, etching systems, annealing systems, ion implantation systems, vacuum furnaces and vapor deposition polymerization systems for semiconductor processing, LED devices, photovoltaics, optic films, LCD displays, magnetic sensors, and electronic materials; and vacuum components including vacuum pumps, gauges, leak detectors, vacuum valves, and vacuum parts. The Vacuum Application segment provides sputtering target materials, evaporation deposition materials, and titanium and tantalum processing products.

Union Tool Co.

Union Tool is mainly engaged in the design, manufacture and sale of industrial cutting tools and other machine tools. Co.'s principal products include carbide drills for printed circuit boards (PCB drills) and related equipment, such as MDP drill pointers, RSM-A ring setting machines (automatic), RSM ring setting machine, OPTEC-M non-contact drill diameter/measuring machine and OPTECH-RI-IV spindle runout measuring machine; as well as carbide end mills, linear motion bearings, digital measuring systems, rolling machines and dies, forging tools, and coating rods. Co., along with its subsidiaries, operates in Japan, Asia, North America, and Europe.

X5 Retail Group N.V. GDR

X5 Retail Group is a holding company. The main activity of Co. is the development and operation of grocery retail stores. Co. operates a retail chain of soft-discount, supermarket and hypermarket stores under the brand names "Pyaterochka", "Perekrestok" and "Karusel" in major population centres in Russia, including but not limited to Moscow, St. Petersburg, Nizhniy Novgorod, Rostov-on-Don, Kazan, Samara, Lipetsk, Chelyabinsk, Perm, Ekaterinburg and Kiev, Ukraine.


Xero is engaged in the provision of a platform for online accounting and business services to small businesses.

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.

Dave Nicoski

Ross LaDuke

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