Vermilion Int'l Compass: Global Equity Strategy
Defensives Worthy of a Tactical OverweightAs recently as last week (March 30 Int'l Compass) and throughout February/March we have recommended shifting to defensives due to our belief that $93 will cap upside on the MSCI ACWI (ACWI-US) in 2023. MSCI ACWI defensive Sectors including Health Care, Utilities, and Consumer Staples are hitting 2+ month RS highs, and are staging bullish price and RS reversals, as are precious metals miners (GDX-US). This confirms our belief that now is the time to be tactically overweight defensives.
Indexes in Europe/UK Testing Resistance. While we remain overweight Europe, prices on many indexes are testing resistance, making this a logical rejection spot. This includes the EURO STOXX 50 testing 4330, the DAX testing 15,700, the CAC 40 testing 7400, and the FTSE 100 testing 7700... see page 2.
Bullish EM Countries. As discussed in our March 27, 2023 EM Strategy report and reiterated last week (March 30 Int'l Compass), we continue to find opportunity within emerging markets, especially in China (Shanghai Comp./CSI 300), Hong Kong (Hang Seng), Taiwan (TAIEX), and South Korea (KOSPI)... see page 3.
Crude Oil, Broad Commodities. Crude oil prices and the Bloomberg Commodity index (DJP-US) have rallied on the back of a surprise production cut from OPEC+. They are all testing critical resistance levels, including $82 on WTI, $87-89 on Brent, and $32-32.50 on the DJP-US. As long as they remain below these resistance levels we believe this sets up a selling opportunity, though breaks above resistances would be buy signals... see page 4.
Actionable Themes: Health Care, Precious Metals Miners, and Utilities. As mentioned above, we have been recommending shifting into defensives since our February 2, 2023 Int'l Compass. Defensives have now emerged as leadership, and we believe outperformance is likely to continue. We highlight our favorite names to buy/stay long within Health Care, precious metals miners, and Utilities. The vast majority of names highlighted within Health Care and Utilities are from Europe, as the STOXX Europe 600 Health Care and Utilities Sectors display major bullish price and RS inflections - buy... see pages 5-17.
Beijing Tiantan Biological Products is engaged in the manufacture and sale of biological products and in vitro diagnosis reagent. Through its subsidiaries, Co. is also engaged in the production of live attenuated varicella vaccine and measles vaccine; and the development, technical transfer and provision of technical services on biological products.
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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