Vermilion Int'l Compass: Global Equity Strategy
Add To Global Technology and Consumer DiscretionaryNot much has changed in the past week in terms of the big picture. Market dynamics remain largely healthy and we see signs that suggest global equities are entering a new broad-based bull market -- be we are not quite there yet. Select regions such as the US, Europe, Japan, and India are bullish, while others are not -- namely Hong Kong and China. Continue to be selective until we get breakouts and/or bullish inflections on the MSCI ACWI ex-US, EAFE, and EM indexes.
Index Overview. The MSCI ACWI (ACWI-US) remains above base support at $105-$105.40, but the other broad global indexes have not been able to break above key resistances. Important resistance levels we are watching on the MSCI ACWI ex-US (ACWX-US), EAFE (EFA-US), and EM (EEM-US) include $58.50, $82.25, and $53.60, respectively. Until we get breakouts above these resistance levels, we continue to expect more consolidation and mixed markets.
Hang Seng, MSCI China. For months, China has been one of our primary concerns. Weakness in China (Hang Seng, MSCI China) has been largely politically-driven and self-inflicted, but it still weighs on global risk sentiment. On a positive note, we believe both the Hang Seng and MSCI China (MCHI-US) indexes are going through a bottoming process... see page 2.
US Dollar. The US dollar (DXY) broke above longer-term resistance at $94.70-$95, something that we expected to weigh on global equity markets and overall risk sentiment. So far, it has not; we view this as an encouraging sign, however this DXY strength has our antennas up. We are watching potential resistance at $96. Continued DXY strength is likely to be problematic for global equities... see page 2.
Actionable Themes: Consumer Discretionary & Technology. Relative strength (RS) for MSCI ACWI Technology is breaking out to new highs while RS on the MSCI ACWI Discretionary Sector is on the cusp of a breakout. We highlight buy opportunities within these Sectors... see charts below and pages 3-12.
Binh Thanh Import-Export Production and Trade Joint Stock Company (Gilimex) is a Vietnam-based company engaged in the apparel and accessories industry. The Company manufactures and markets backpacks, handbags, leather goods and other clothing products. It is involved in the processing and trading of seafood products, along with the trading of materials and equipment for the accessories industry. The Company has three wholly-owned subsidiaries and two affiliates providing tailoring and real estate services
Financiere Moncey is a holding company. Through its subsidiaries, Co. derives the majority of its revenues from investments in the financial and industrial sectors (such as banks, real estate and air transportation companies).
Hermes International is engaged in the manufacture, sale, and distribution of luxury goods primarily in France, rest of Europe, Japan, Asia-Pacific, and Americas. Co.'s activities can be divided into two segments: the distribution via Co.'s exclusive network and the distribution via specialist outlets. The distribution via Co.'s exclusive network comprises silks and textiles, leather goods and saddlery, ready-to-wear and fashion accessories (men and women's clothing, belts, jewellery accessories, gloves, hats and shoes), and other goods (jewellery and products of the art of living department). The distribution via specialist outlets comprise perfumes, tableware and watches.
HUGO BOSS Group is engaged in the global apparel market. The Group, which is based in Metzingen Germany employs almost 12,500 people, generated annual sales of EUR 2.4 billion in fiscal year 2013 and is an apparel manufacturer. The Group focuses on developing and marketing high-end women's and men's fashion and accessories. With its brand including the BOSS core brand, the lines BOSS Orange, BOSS Green and the progressive brand HUGO, Co. targets different, consumer groups. The brands consists of modern business wear, evening wear and sportswear, shoes and leather accessories as well as licensed fragrances, eyewear, watches, children's fashion, home textiles and mobile accessories.
Puma and its subsidiaries are engaged in the development and sale of a broad range of sports and sports lifestyle products, including footwear, apparel and accessories. Product management, design, development and category-specific marketing have been combined under six separate Business Units. The Business Units Teamsport, Running, Training & Fitness, and Golf represent Co.'s performance business, while Lifestyle and Motorsports, Fundamentals as well as Accessories & Licensing constitute the lifestyle business.
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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