Vermilion Int'l Compass: Global Equity Strategy
"Lockout Rally" Underway; Downgrading ChinaWe had a near-term bullish outlook on MSCI ACWI (ACWI-US) and the S&P 500 (SPX) from 4/22/25 to 11/18/25. After being near-term neutral for a week, we flipped back to bullish in our 11/25/25 Compass, all while maintaining our intermediate-term bullish outlook (as of our 5/14/25 Compass). We will stay near-term bullish as long as crucial support levels of 6480-6520 on SPX and $135.70 on ACWI-US continue to hold. We will maintain our bullish intermediate-term view as long as market dynamics remain healthy and the SPX and ACWI-US are above 6200 and $128. Short-term supports to watch on ACWI-US include $140-$140.25 and $135.70. Longer-term supports include $134-$134.50, $131.50-$132, $130, and $128. Market dynamics remain largely risk-on, and we continue to expect more upside into year-end and early-2026 as a "lockout rally" gets underway.
Downgrading China; Remain Overweight Japan, Taiwan, Korea, and the U.S; U.S. Dollar (DXY) Holding Below $100.80. We are downgrading China (Shanghai Composite) to market weight following the 7.5-month uptrend violation and 10-month RS uptrend violation -- be selective. Our four country overweights include Japan (TOPIX), Taiwan (TAIEX), Korea (KOSPI), and the U.S. (S&P 500). We recently upgraded Japan in our 11/18/25 Int'l Macro Vision. Europe's EURO STOXX 50 remains bullish after holding strong above crucial support at 5500. The U.S. dollar (DXY) holding below $100.25-$100.80 resistance is another crucial risk-on signal. This is all very bullish for global equities over the intermediate-term.
Emerging Markets Overview. We remain bullish on EM with the 7-month uptrend intact on MSCI Emerging Markets (EEM-US). We expect support at the uptrend (currently $53.50) and also at $51.80-$52.35. Taiwan and Korea remain our favorite EM countries to be buying/overweight, though India remains attractive as well. In terms of Sectors, MSCI EM Technology and Materials are our favorites, while Financials and Industrials are honorable mentions.
Actionable Themes: Technology, Materials, Discretionary, Energy, and Financials. Technology remains global leadership -- remain overweight/add exposure. Technology has been our primary focus for months. We also highlight attractive names within Materials, Discretionary, Energy, and Financials -- these Sectors are leading within select markets (i.e., some combination of Europe, Japan, and/or EM, etc.)... see pages 3-23.
HORIBA and its affiliates are engaged in the manufacture and sale of measuring instruments and analytical instruments. Co.'s business segments are automotive test systems, process & environmental instruments & systems, medical-diagnostic instruments & systems, semiconductor instruments & systems, and scientific instruments & systems. Co.'s principal products are emission measurement systems, automotive emission analyzers, and on-board emission measurement systems; scientific analysis instruments and environmental measuring instruments; equipment for blood sample analysis; mass flow controllers, chemical concentration monitors, and thin-film analyzers; and scientific analysis instruments.
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.
VAT Group AG is a Switzerland-based company engaged in the manufacture of industrial valves. The Company focuses on designing and producing vacuum valves for semiconductor, display and solar panel manufacturing, as well as for a range of industry and research applications. Its activities are divided into three business areas: Valves, Global Services and Industry. The Valves division provides isolation, control and transfer valves used in vacuum-based manufacturing processes. The Global Services area offers advisory and after sales services, such as trainings, equipment repair and overhaul, valve upgrade and spare parts sale. The Industry segment manufactures and markets welded bellows, machine parts, mechanical components and assemblies. The Company operates worldwide.
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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