Vermilion Int'l Compass: Global Equity Strategy
MSCI EM Improving; Buys in Value & Large-Cap EMGlobal equities (MSCI ACWI) have marginally broken above the top-end of our anticipated 2023 trading range of $93 on ACWI-US. In our April 18, 2023 Int'l Macro Vision we acknowledged that a break above $93 and a reach to $96-$97 was also possible – and so far, this is what has played out. The break above $93 signals a 1-year inverse head-and-shoulders breakout, a very bullish pattern that provides a “measured move” target of $110.29, or roughly 16% upside from current levels. We are skeptical considering the Fed is likely to continue raising rates to battle inflation, and also due to increasingly bullish sentiment. We will continue to watch the $93 level for a potential false breakout, but as long as the ACWI-US is above $90.50, we cannot be bearish, something we initially discussed in our 6/2/23 Int'l Compass.
Reiterations From 6/13/23 Int'l Macro Vision. To recap the main points from our 6/13/23 Int'l Macro Vision, (1) we downgraded Europe to market weight, yet we are still bullish Europe from a price perspective as long as the uptrend from the December 2022 lows is intact on the EURO STOXX 50, (2) we downgraded non-US equites (MSCI EAFE and ACWI ex-US) to neutral, and (3) we reiterated current country overweights, which include Japan, India, Taiwan, and Greece.
Hang Seng Above 19,000, Emerging Markets Improving. Hong Kong's Hang Seng is back above our important line-in-the-sand at 19,000, a constructive signal. Additionally, MSCI EM (EEM-US) continues to show signs of bottoming. Samsung Electronics (005930-KR) and Taiwan Semiconductor (2330-TW, TSM-US) are two large-cap leaders that we remain bullish on, while Alibaba (9988-HK, BABA-US) is an attractive bottom-fishing candidate as long as it is above the May lows... see chart below and page 4.
Actionable Theme: Consumer Discretionary. This Sector continues to have many bright spots, especially in Japan. Four stocks highlighted include: Bridgestone (5108-JP), Sumitomo Rubber (5110-JP), Aston Martin Lagonda Global (AML-GB), and Metro Brands (543426-IN)... see page 5.
Actionable Theme: Value Sectors. Traditional value Sectors have not been global leadership, but that could change as we enter the second half of 2023. We highlight our favorite names to buy within Energy, Industrials, and Materials... see pages 2-3 and 6-17.
INPEX is mainly engaged in the energy supply business on a global scale. Co.'s operations include acquisition of license blocks for oil and gas fields, exploration, development, production and sales of oil, natural gas and other mineral resources. Co. is involved in about 70 upstream projects located in 20 countries around the world such projects as "Sebuku Block Ruby Gas Field," "Abadi LNG Project," "Tangguh LNG Project," "Ichthys LNG Project," "Bayu-Undan Project," "Prelude FLNG Project" and other. Co. is engaged in the natural gas transportation, pipeline operation, maintenance and management; the refining domestic crude oil; and the storage and shipment of petroleum products.
Santos is a natural gas company engaged in the exploration for, and development, production, transportation and marketing of, hydrocarbons. Co.'s operating segments consist of five key assets/operating areas of: Cooper Basin; Gladstone LNG; Papua New Guinea; Northern Australia; and Western Australia gas; based on the nature and geographical location of the assets, plus Other non-core assets. Co.'s proved petroleum reserves were 485.0 million barrels of oil equivalent at Dec 31 2016.
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.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.