Report
Dave Nicoski ...
  • Ross LaDuke
EUR 46.72 For Business Accounts Only

Vermilion Compass: Weekly Equity Strategy

Still Expecting 4165-4200 on S&P 500 to Cap Upside

The S&P 500 is holding above its 200-day MA (at 3940) which coincides with its prior downtrend from all of 2022 near 3915; 3915-3940 remains critical support, and continues to be the gateway to a much deeper pullback. Additionally, the Nasdaq 100 (QQQ) is breaking back above $297, another important line in the sand for us. As for the negatives, the Russell 2000 (IWM) is having trouble reclaiming the important $190 level, and it underperformed significantly yesterday in what we can interpret as more breadth deterioration (continuing a trend we discussed last week). The S&P 500 holding at 3915-3940 could be the spark that allows another run toward YTD highs. Still, our longer-term outlook remains neutral, and we continue to expect 4165-4200 to cap upside on the S&P 500.

S&P 500, Dow Jones Industrial Average. 4060 is short-term resistance we are monitoring, and we continue to expect 4165-4200 to cap upside. Support is at 3915-3940, and
Underlyings
Ambac Financial Group Inc.

Ambac Financial Group is a financial service holding company. The company's provides financial guarantee policies through its principal operating subsidiary, Ambac Assurance Corporation and its wholly owned subsidiary Ambac Assurance UK Limited. The company has another wholly-owned subsidiary, Everspan Financial Guarantee Corp. Through its subsidiaries, the company operates in one business segment: financial guarantee insurance, which consists of insurance policies issued provide an unconditional and irrevocable guarantee which protects the holder of a debt obligation against non-payment when due of the principal and interest on the obligations guaranteed.

Aon Plc Class A

Arch Capital Group Ltd.

Arthur J. Gallagher & Co.

Gallagher (Arthur J.) is a holding company. Through its subsidiaries, the company provides insurance brokerage, consulting and third party claims settlement and administration services to both domestic and international entities. The company's segments are: brokerage, which is primarily comprised of its retail and wholesale insurance brokerage operations; risk management, which provides contract claim settlement and administration services for enterprises and public entities that choose to self-insure their property/casualty coverages and for underwriting enterprises that choose to outsource their property/casualty claims departments; and corporate, which manages its clean energy and other investments.

Commercial Metals Company

Commercial Metals, together with its subsidiaries, manufactures, recycles and markets steel and metal products, related materials and services. The company has four reportable segments: Americas Recycling, which processes scrap metals for use as a raw material by the company and other manufacturers of new metal products; Americas Mills, which operates electric arc furnace (EAF) mini mills, EAF micro mills, rerolling mill, scrap metal shredders, and scrap metal processing facilities; Americas Fabrication, which includes warehouses that sell or rent products for the installation of concrete; and International Mill, which consists of an EAF mini mill, recycling and fabrication operations located in Poland.

Everest Re Group Ltd.

Everest Re Group is a holding company. Through its subsidiaries, the company underwrites reinsurance and insurance in the United States, Bermuda and international markets. The company's segments are: U.S. Reinsurance, which writes property and casualty reinsurance and specialty lines of business, including Marine, Aviation, Surety and Accident and Health business; International, which focuses on the international reinsurance markets; Bermuda, which writes property and casualty reinsurance and property and casualty reinsurance; and Insurance, which writes property and casualty insurance through agents, wholesale and retail brokers and surplus lines brokers in the United States, Canada, Ireland, Bermuda.

Fanhua ADS (N Shares)

Goosehead Insurance

Goosehead Insurance is a holding company. Through its subsidiaries, the company is an independent personal lines insurance agency. The company provides consumers with insurance coverage. The company's insurance product offerings primarily consist of homeowner's insurance; auto insurance; other personal lines products, including flood, wind and earthquake insurance; excess liability or umbrella insurance; other lines insurance (motorcycle, recreational vehicle and other insurance); commercial lines insurance (general liability, property and auto insurance for small businesses); and life insurance.

Greenlight Capital Re Ltd. Class A

Heritage Insurance Holdings Inc.

Heritage Insurance Holdings is a property and casualty insurance holding company. Through its subsidiaries, the company writes personal residential property insurance for single-family homeowners and condominium owners, and rental property insurance in Alabama, Connecticut, Florida, Georgia, Hawaii, Massachusetts, New Jersey, New York, North Carolina, Rhode Island and South Carolina. The company also provides commercial residential insurance for Florida properties and is also licensed in Maryland, Mississippi, Pennsylvania, and Virginia. The company controls or manages substantially all aspects of insurance underwriting, customer service, actuarial analysis, distribution and claims processing and adjusting.

James River Group Holdings Ltd

Kingsway Financial Services

Kingsway Financial Services is a holding company. Through its subsidiaries, Co. operates as a merchant bank engaged in the property and casualty insurance business. Co. operates three segments: Insurance Underwriting, which markets automobile insurance products that provide coverage in three main areas: liability, accident benefits and physical damage; Insurance Services, which includes IWS Acquisition Corporation, a licensed motor vehicle service agreement company, and Trinity Warranty Solutions LLC, a provider of warranty products and maintenance support; and Leased Real Estate, which includes Co.'s subsidiary, CMC Industries, Inc., that owns a parcel of real property located in Texas.

Kinsale Capital Group Inc.

Kinsale Capital Group is an insurance holding company. The company focuses on the excess and surplus lines (E&S) market in the U.S., where it can use its underwriting capability to write coverages for hard-to-place small business risks and personal lines risks. The company's segment, Excess and Surplus Lines Insurance segment provides property and casualty insurance products through the E&S market. The company's commercial lines offerings include construction, small business, excess casualty, energy, product liability, general casualty, allied health, professional liability, life sciences, commercial property, management liability, health care, environmental, inland marine, public entity, and commercial insurance.

Nucor Corporation

Nucor manufactures steel and steel products. The company's operations include international trading and sales companies that buy and sell steel and steel products. The company's segments are: steel mills, which produces sheet steel, plate steel, structural steel, and bar steel; steel products, which produces hollow structural section steel tubing, electrical conduit, steel joists and joist girders, steel deck, cold finished steel, steel fasteners, metal building systems, and wire and wire mesh; and raw materials, which produces direct reduced iron (DRI), brokers ferrous and nonferrous metals, pig iron, hot briquetted iron and DRI, supplies ferro-alloys, and processes ferrous and nonferrous scrap metal.

Reinsurance Group of America Incorporated

Reinsurance Group of America is an insurance holding company. Through its subsidiaries, the company is a provider of life and health reinsurance and financial solutions. The company is engaged in providing reinsurance, which includes individual and group life and health, disability, and critical illness reinsurance. The company also provides financial solutions, which includes longevity reinsurance, asset-intensive products, primarily annuities, financial reinsurance, capital solutions and stable value products. The company has five geographic-based and business-based operational segments: United States and Latin America, Canada, Europe, Middle East and Africa, Asia Pacific, and Corporate and Other.

Reliance Steel & Aluminum Co.

Reliance Steel & Aluminum is a metals service center company. The company provides metals processing services and distributes a line of metal products, including alloy, aluminum, brass, copper, carbon steel, stainless steel, titanium and specialty steel products, to its customers in a range of industries, including general manufacturing, non-residential construction (including infrastructure), transportation (rail, truck trailer and shipbuilding), aerospace and defense, energy (oil and gas), electronics and semiconductor fabrication, and heavy industry (agricultural, construction and mining equipment). The company also services the auto industry, primarily through its toll processing operations.

RENAISSANCERE HOLDINGS LTD.

RenaissanceRe Holdings is a holding company. Through its subsidiaries, the company is a global provider of reinsurance and insurance. The company's segments are: Property, which includes its catastrophe class of business, comprising excess of loss reinsurance and excess of loss retrocessional reinsurance to insure insurance and reinsurance companies against natural and man-made catastrophes, and its other property class of business, comprising proportional reinsurance, property per risk, property (re)insurance, binding facilities and regional United States multi-line reinsurance; and Casualty and Specialty, in which the company provides its casualty and specialty reinsurance products and excess of loss coverage.

Ryerson Holding Corporation

Ryerson Holding is a metals service center, a processor and distributor of industrial metals. The company provides flat and long metals products. The company also provides processing and fabrication services such as bending, beveling, blanking, blasting, burning, cutting-to-length, drilling, embossing, flattening, forming, grinding, laser cutting, machining, notching, painting, perforating, polishing, punching, rolling, sawing, scribing, shearing, slitting, stamping, tapping, threading, welding, or other techniques to process materials to a specified thickness, length, width, shape, and surface quality pursuant to specific customer orders. The company operates across North America and in China.

Schnitzer Steel Industries Inc. Class A

Schnitzer Steel Industries is engaged as a recycler of ferrous and nonferrous scrap metal, including end-of-life vehicles, and a manufacturer of finished steel products. The company has two segments: Auto and Metals Recycling, which acquires and recycles ferrous and nonferrous scrap metal for sale to foreign and domestic metal producers, processors and brokers, and procures salvaged vehicles and sells serviceable used auto parts from these vehicles through a network of self-service auto parts stores; and Cascade Steel and Scrap, which produces a range of finished steel long products using ferrous recycled scrap metal and other raw materials.

SiriusPoint Ltd

Slottsviken Fastighets AB

Steel Dynamics Inc.

Steel Dynamics is a steel producer and metal recycler. The company manufactures and sells steel products, processes and sells recycled ferrous and nonferrous metals, and fabricates and sells steel joists and deck products. The company's segments are: Steel, which produces steel from ferrous scrap and scrap substitutes, utilizing casting, automated rolling mills and several downstream steel coating and bar processing lines, and Iron Dynamics; metals recycling, which involves the purchase, processing, and resale of ferrous and nonferrous scrap metals into reusable forms and grades; and steel fabrication, which produces steel building components, including steel joists, girders, trusses, and steel deck.

Universal Insurance Holdings Inc.

Universal Insurance Holdings is a holding company. Through its subsidiaries, the company provides property and casualty insurance and insurance services. The company's products and services include: Insurance Products, which provide various types of personal residential insurance such as homeowners, renters/tenants, condo unit owners, and dwelling/fire; Risk Management, in which its subsidiary, Evolution Risk Advisors, Inc., advises on actuarial issues, oversees distribution, administers claims payments, performs policy administration and underwriting, and assists with reinsurance negotiations; and Distribution, which provides policies through its direct-to-consumer online distribution platforms.

Willis Towers Watson Public Limited Company

Worthington Industries Inc.

Worthington Industries is a metals manufacturing company, focused on steel processing and manufactured metal products. The company operates three segments: Steel Processing, which buys coils of steel from integrated steel mills and mini-mills and processes them to customer specifications; Pressure Cylinders, which manufactures and sells filled and unfilled pressure cylinders, tanks, hand torches, well water and expansion tanks, and oil and gas equipment with accessories and related products for end-use market applications; and Engineered Cabs, which designs and manufactures custom-engineered open and enclosed cabs and operator stations and custom fabrications and packaging for mobile equipment.

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

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