Report
Dave Nicoski ...
  • Ross LaDuke
EUR 47.74 For Business Accounts Only

Vermilion Int'l Compass: Global Equity Strategy

Bullish Outlook Intact; U.S. Dollar (DXY) Rolling Over

We continue to see more and more global indexes and Sectors breaking out to new highs. This is classic bull market behavior. Our bullish outlook (since early November 2023) remains intact; continue to ride this trend higher, and treat pullbacks as buying opportunities.

U.S. Dollar (DXY); 10-Year Treasury Yield. We continue to get more evidence that suggests the U.S. dollar (DXY) is rolling over; last week we discussed the failed breakout at $104.60-$104.70 (which is bearish for the DXY), and the DXY now displays a YTD uptrend violation. As long as the DXY remains below $104.70, we view it as a significant risk-on signal for global equities. Additionally, the 10-year Treasury yield (a proxy for global 10-year sovereign yields) also appears to be rolling over at critical resistance at 4.35%. Much like the DXY, if global yields can also move lower, it would be a significant risk-on signal for global equities... see charts below.
More Global Indexes Breaking Out. Europe's EURO STOXX 50, MSCI ACWI (local), MSCI EAFE (local), and all of our country overweights (Japan, India, Greece, Poland, and Brazil) remain bullish, but more countries are starting to break out -- in addition to the long list that we highlighted last week (February 23, 2024 Int'l Compass). We view this as classic bull market behavior, and is one of many reasons we continue to have a bullish outlook overall. Additional countries breaking out include Israel's TA-125, Germany's DAX, and Sweden's OMX Stockholm 30... see page 2.
Actionable Themes: Consumer Discretionary and Technology. Our favorite global Sectors continue to be Consumer Discretionary, Technology, Industrials/Manufacturing, and Services. Today we are focusing on Consumer Discretionary and Technology. Global Consumer Discretionary (RXI-US) displays bullish price and RS inflections, and is just now starting to emerge as leadership -- add exposure. Meanwhile, global Technology (IXN-US) remains established leadership... see pages 3-14.
Underlyings
Asics Corporation

ASICS is a sporting goods manufacturing group engaged in the manufacture and sale of a wide variety of sporting goods. Some of Co.'s products include sports shoes, including running shoes, walking shoes, fitness shoes and work shoes, sportswear and accessories, running watches, and other sports related good and equipment. In addition, Co., through its subsidiaries, is engaged in the manufacture and sale of HAGLOFS brand outdoor equipment. Co.'s businesses are divided into six business segments: Japan, Americas, Europe, Oceania/Southeast and South Asia, and East Asia.

Christian Dior SE

Christian Dior is a holding company engaged in the market of luxury goods. Co., through its subsidiaries, is organized around seven sectors of activity: Design, manufacturing and sale of luxury articles (Christian Dior Couture); Sales of wine and spirits; Manufacturing and distribution of fashion and leather goods; Sales of perfumes and cosmetics; Sales of watches and jewelry; Selective retailing and Other activities (Newspapers and real estate). Co.'s revenues can be divided geographically between four groups: Europe, USA, Asia and Other countries. Co.'s products are sold through wholesale and retail distributors as well as through company-owned stores or franchised outlets.

Daimler AG

Daimler provides a range of transportation products, including passenger cars and commercial vehicles, and also financial services. Co. operates in five segments. Mercedes-Benz Cars sells passenger cars and off-road vehicles under the Mercedes-Benz brand and small cars under the smart brand. The Daimler Trucks distributes its trucks (Mercedes-Benz, Freightliner, FUSO, Western Star, Thomas Built Buses and BharatBenz). The vans of the Mercedes-Benz Vans segment are sold under the brand name Mercedes-Benz and Freightliner. Daimler Buses sells completely built-up buses (Mercedes-Benz and Setra). The Daimler Financial Services division supports sales of Co.'s automotive brands.

Hikari Tsushin Inc.

HIKARI TSUSHIN is a holding company. Co., through its affiliates, operates in three principal business segments. Corporate segment is engaged in the door-to door sale of office automation ("OA") equipment, eco-friendly products, telecommunication line service, and enterprise solution services for small and medium-sized enterprises. It also provides the communication line such as fixed line and broadband line. SHOP segment is engaged in the sale of mobile phones, mobile Wi-Fi routers and mobile applies (contents) through its nationwide sales channels. Insurance segment is engaged in the sale of insurance policies to customers using telemarketing at its nationwide call centers.

Sanrio Company Ltd.

Sanrio is engaged in the planning and sale of social communication gifts, greeting cards and books; and the planning and operation of theme parks using its own developed characters. The principal characters include "Hello Kitty," "Little Twin Stars Kiki & Lala," "My Melody," "Shinkansen,"" Cinnamoroll," "Pompom Purin," "Jewelpet" and " Patty & Jimmy." Co. also engaged in the management of restaurants (Kentucky Fried Chickens), the lease of cars, the production and rental of robots, the film production, as well as the provision of non-life insurance agency services.

SUBARU CORP

SUBARU and its affiliates are mainly engaged in the manufacture and sale of automobiles and aerospace-related equipment. The Automobiles segment is engaged in the manufacture, sale and repair of passenger cars and their components under the name of "SUBARU." The Aerospace segment is engaged in the manufacture, sale and repair of commercial and defense aircrafts, helicopters, unmanned aerial vehicles and their components. In addition, Co. is engaged in the manufacture, sale and repair of generators, engine-equipped machinery, agricultural machinery, construction machinery and their components; the leasing of real estate; and the manufacture and sale of temporary houses.

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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