Report
Dave Nicoski ...
  • Ross LaDuke
EUR 47.94 For Business Accounts Only

Vermilion Int'l Compass: Global Equity Strategy

Remain Overweight and Add Exposure to Japan

The MSCI ACWI index (ACWI-US) continues to hold above major support at $90.50-$91.50; as long as this support area holds, we remain constructive on global equities. MSCI EM (EEM-US) continues to hold above $$37 support, while MSCI ACWI ex-US (ACWX-US) and EAFE (EFA-US) are testing supports at $45 and $65-$66, respectively.

Japan Remains Leadership. Remain overweight and add exposure to Japan; the TOPIX remains in a 1.5-year RS uptrend (vs. MSCI ACWI), and continues to hold above 5-month support at 2200-2215... see chart below. Our only other country overweight is India.
"Next Down" Support Levels on EURO STOXX 50, MSCI ACWI ex-U.S., and MSCI EAFE. These three indexes are all testing their "next down" support levels, which we initially discussed in our Sept. 29, 2023 Int'l Compass following breakdowns below 4200 on the EURO STOXX 50, $47.50 on MSCI ACWI ex-U.S. (ACWX-US), and $69-$70 on MSCI EAFE (EFA-US). These levels are now resistance, and it would be bullish if these indexes can reclaim these levels. "Next down" supports being tested include 4000 on the EURO STOXX 50, $45 on ACWX-US, and $65-$66 on EFA-US. This is a logical spot for a bounce, but we cannot get bullish until resistance levels are reclaimed... see page 2.
U.S. Dollar (DXY), 1-Year Global Sovereign Bonds. The DXY remains above $105.70; global equities are likely to struggle, and possible break below $90.50 on ACWI-US if the DXY is above $105.70, while a break below it would be bullish for global equities. At the same time, global 1-year sovereign yields generally remain below multi-month resistance (our proxy is 5.55% resistance on the 1-year Treasury yield); this is a positive as long as it remains true.
Actionable Themes: Insurance, Services, Technology. Insurance stocks and the Services Sector remain global leadership. We also highlight several stocks to buy/stay long within Technology... see pages 3 and 5-11.
Underlyings
Iovance Biotherapeutics Inc

Iovance Biotherapeutics is a clinical-stage biopharmaceutical company focused on the development and commercialization of cancer immunotherapy products. The company's main product candidate, LN-144 for metastatic melanoma, is an autologous adoptive cell therapy utilizing tumor-infiltrating lymphocytes, which are T cells derived from patients' tumors. The ongoing studies include LN-145 for metastatic or persistent cervical carcinoma and LN-145 for recurrent and/or metastatic squamous cell carcinoma of the head and neck.

JAPAN POST INSURANCE Co. Ltd.

Japan Post Insurances is a life insurance company based in Japan within the Japan Post Group of companies. Co. provides its customers with reliable insurance services, serving individual customers through Japan Post's nationwide network of post offices and corporate customers through sales offices directly managed by the group. Co. is engaged in the collection of insurance premiums and the payment of insurance benefits and various other procedures. Co. maintains business activities through a regional network of approximately 20,050 post offices, 599 contracted post offices and 82 Japan Post Insurance branches as of Mar 31 2017.

Munich Reinsurance Company

Muenchener Rueckversicherungs-Gesellschaft is engaged in reinsurance, primary insurance and asset management. Co.'s international life business is written in the Life Division. The Global Clients and North America division manages accounts with international insurance groups. The Europe and Latin America division manages property-casualty business in Europe, Latin America and the Caribbean. The Germany, Asia Pacific and Africa division conducts property-casualty business in Germany, Africa, Asia, Australia and the Pacific Islands. The Special and Financial Risks division manages the classes of credit, aviation and space, agriculture, enterprise and contingency risks.

Powszechny Zaklad Ubezpieczen Spolka Akcyjna

Powszechny Zaklad Ubezpieczen is an insurance group based in Poland. Co. is engaged in offering a broad range of insurance and financial products. Co. pursues three main lines of business: Property and Casualty Insurance, offered by PZU; Life Insurance, offered by PZU Zycie; and Open-end Pension Funds, offered by PTE PZU, the manager of OFE PZU Zlota Jesien. Co. maintains a network of sales and service outlets including 500 outlets throughout Poland, including 243 shared outlets (common for PZU and PZU Zycie), 137 outlets of PZU Zycie and 120 outlets of PZU. Co.'s business is focused on the Polish market but it also conducts insurance business in the Lithuanian and Ukrainian markets.

Swiss Re AG

Swiss Re is engaged in wholesale reinsurance, insurance and risk transfer solutions. Co.'s clients include insurance companies, corporations, the public sector and policyholders. Co.'s business units include: Property & Casualty Reinsurance, which includes the business lines property and casualty (including motor); Life & Health Reinsurance, which includes the life and health line of business; Corporate Solutions, which serves mid-sized and large corporations, with product offerings ranging from property and casualty insurance to customised solutions; and Admin Re®, which provides risk and capital management solutions.

Western Atlas Resources

Western Atlas Resources is an exploration stage company and is engaged in the business of acquiring, exploring and evaluating mineral properties or developing these properties further or disposing of them when the evaluation is completed. Co. has not yet determined whether these properties contain ore reserves that are economically recoverable. The recoverability of amounts shown for mineral properties is dependent upon the discovery of economically recoverable reserves, the ability of Co. to obtain necessary financing to satisfy the expenditure requirements and to complete the development of properties and upon future profitable production or proceeds from the disposition thereof.

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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