European Event-Driven Analyst

Jesus Rodriguez Aguilar

Index Rebalance

<ul>
<li>Société Générale and Engie lead our current addition screen, while Nokia/E.ON remains a live race: just 1.9% relative performance separates the two ahead of the 31 August cut-off.</li>
<li>The flow numbers favour the addition side: estimated ETF buying reaches ~7x ADV for Engie and 6.3x for E.ON, compared with 2–3x ADV selling for the main deletion candidates.</li>
<li>We favour the addition side: Engie offers the strongest prospective flow/liquidity setup, while E.ON becomes particularly interesting if it overtakes Nokia; we are more cautious on pre-positioning deletion shorts.</li>
</ul>


Société Générale and Engie lead our current addition screen, while Nokia/E.ON remains a live race: just 1.9% relative performance separates the two ahead of the 31 August cut-off.
The flow numbers favour the addition side: estimated ETF buying reaches ~7x ADV for Engie and 6.3x for E.ON, compared with 2–3x ADV selling for the main deletion candidates.
We favour the addition side: Engie offers the strongest prospective flow/liquidity setup, while E.ON becomes particularly interesting if it overtakes Nokia; we are more cautious on pre-positioning deletion shorts.


EURO STOXX 50: Trading the September Rebalance

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

iShares MSCI ACWI ETF / Technical Analysis

<ul>
<li>On March 2 we discussed how the pullback in global equities was in full swing as Europe/UK indexes displayed 4.5-month uptrend breaks, joining the pullback in the MSCI ACWI.</li>
<li>At the time, we expected this pullback in the MSCI ACWI (ACWI-US) to move down to $86-87 at minimum, and potentially $84 (December 2022 low) or $75-77 (the 2022 lows).</li>
<li>ACWI-US broke below $86 and is approaching $84. $84 will be an important support level to monitor, but if it breaks, the $75-77 level is still firmly in the cards.</li>
</ul>


On March 2 we discussed how the pullback in global equities was in full swing as Europe/UK indexes displayed 4.5-month uptrend breaks, joining the pullback in the MSCI ACWI.
At the time, we expected this pullback in the MSCI ACWI (ACWI-US) to move down to $86-87 at minimum, and potentially $84 (December 2022 low) or $75-77 (the 2022 lows).
ACWI-US broke below $86 and is approaching $84. $84 will be an important support level to monitor, but if it breaks, the $75-77 level is still firmly in the cards.


Global Pullback Continues; Focus on Defensives: Buys in Staples, Utilities, Precious Metals Miners

<ul>
<li>In our latest int'l reports we have preached caution, and since January we have discussed our expectations for $93 to cap upside on the ACWI-US</li>
<li>Thus far, $93 has proven to be rock-solid resistance, and ACWI-US now displays a 4.5-month uptrend violation signaling the pullback has officially begun.</li>
<li>We would expect this pullback to continue down to $86-87 at minimum, and potentially $84 (December 2022 low). Even $75-77 (the 2022 lows) is not out of the question.</li>
</ul>


In our latest int'l reports we have preached caution, and since January we have discussed our expectations for $93 to cap upside on the ACWI-US
Thus far, $93 has proven to be rock-solid resistance, and ACWI-US now displays a 4.5-month uptrend violation signaling the pullback has officially begun.
We would expect this pullback to continue down to $86-87 at minimum, and potentially $84 (December 2022 low). Even $75-77 (the 2022 lows) is not out of the question.


MSCI ACWI Uptrend Break; Defensives to Shine; Ideas in Staples, Health Care, Telecomm, Utilities

<ul>
<li>Our neutral outlook has come down to price supports holding on the broad global indexes, including $54 on MSCI ACWIex-US (ACWX-US), $76.50 on EAFE (EFA-US), and $99 on ACWI (ACWI-US).</li>
<li>These support levels are now breaking which tilts our stance to bearish at the index level as long as the aforementioned indexes remain below their previous support levels.</li>
<li>We still see the EURO STOXX 50 and TOPIX as holding above support, while the Hang Seng and Bovespa appear to be bottoming, none of which paint a bearish picture.</li>
</ul>


Our neutral outlook has come down to price supports holding on the broad global indexes, including $54 on MSCI ACWIex-US (ACWX-US), $76.50 on EAFE (EFA-US), and $99 on ACWI (ACWI-US).
These support levels are now breaking which tilts our stance to bearish at the index level as long as the aforementioned indexes remain below their previous support levels.
We still see the EURO STOXX 50 and TOPIX as holding above support, while the Hang Seng and Bovespa appear to be bottoming, none of which paint a bearish picture.


Broad Indexes Violate Support But Bright Spots Remain; Buying Energy, Staples, and Utilities

<p>Our neutral and cautious outlook continues to be reinforced by market dynamics that have generally deteriorated over the past week. RS improvement for defensives (Utilities, Staples, Real Estate, and Health Care) continues to make these Sectors attractive. Meanwhile, not one MSCI ACWI Sector is breaking down, and important price support levels are holding in the US, Europe, and Japan. Until supports start to break we cannot be bearish, though we would not be surprised to see ~5% downside with potential for more.</p>

Our neutral and cautious outlook continues to be reinforced by market dynamics that have generally deteriorated over the past week. RS improvement for defensives (Utilities, Staples, Real Estate, and Health Care) continues to make these Sectors attractive. Meanwhile, not one MSCI ACWI Sector is breaking down, and important price support levels are holding in the US, Europe, and Japan. Until supports start to break we cannot be bearish, though we would not be surprised to see ~5% downside with potential for more.

Crude Oil and Copper Breakdowns Reinforce Our Concerns; Defensive Sectors Remain Attractive

Germany

E.ON is one of Europe's largest operators of energy networks and energy infrastructure and a provider of innovative customer solutions for some 51 million customers. The company's operations are energy networks and customer solutions.

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E.ON (EOAN GR)

EURO STOXX 50: Trading the September Rebalance

The EURO STOXX 50 September review is creating increasingly actionable index trades. Our pro-forma ranking and flow model identifies where the...

Jesus Rodriguez Aguilar

Global Pullback Continues; Focus on Defensives: Buys in Staples, Utilities, Precious Metals Miners

Europe/UK STOXX Europe 50/FTSE 100 with concerning breakdowns below 3800 and 7700, joining the pullback that had already started in the MSCI ACWI....

Vermilion Research

MSCI ACWI Uptrend Break; Defensives to Shine; Ideas in Staples, Health Care, Telecomm, Utilities

$93 on $ACWI has proven to be rock-solid resistance, and it now displays a 4.5-month uptrend violation signaling the pullback has officially begun....

Vermilion Research

Broad Indexes Violate Support But Bright Spots Remain; Buying Energy, Staples, and Utilities

We are highlighting Energy again because it is easily our favorite Sector. Additionally, defensive Sectors including Staples and Utilities display...

Vermilion Research

Crude Oil and Copper Breakdowns Reinforce Our Concerns; Defensive Sectors Remain Attractive

Our cautious outlook is reinforced by ongoing developments. Relative strength improvement for defensives (Utilities, Staples, Real Estate, Health...

Vermilion Research

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