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

EURO STOXX 50 Price EUR / Technical Analysis

<ul>
<li>It appears the recent pullback is over, and we could see the MSCI ACWI (ACWI-US) test YTD highs at $93. We still expect $93 to cap upside in 2023.</li>
<li>Overweight Europe/UK and non-U.S., we are buyers on pullbacks as long as FTSE 100 is above 7700, STOXX Europe 50 is above 3800, and EURO STOXX 50 is above 4000.</li>
<li>As long as these support levels are holding, we are constructive from a price perspective</li>
</ul>


It appears the recent pullback is over, and we could see the MSCI ACWI (ACWI-US) test YTD highs at $93. We still expect $93 to cap upside in 2023.
Overweight Europe/UK and non-U.S., we are buyers on pullbacks as long as FTSE 100 is above 7700, STOXX Europe 50 is above 3800, and EURO STOXX 50 is above 4000.
As long as these support levels are holding, we are constructive from a price perspective


Remain Overweight Europe/UK & Non-US Equities; Pullback Over?; Buys in Industrials and Financials

Chief Economist & Political Strategist, CrossASEAN Research

Prasenjit K. Basu

Chief Economist & Political Strategist

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

Macroeconomics

<ul>
<li>Germany, the EU's most consequential power, now has a "traffic-lights" coalition government with an ambitious agenda for its structural transformation into a green, digitized economy. </li>
<li>Socially-Liberal policies, including expunging 'race" from the constitution, will allow greater entry of technology professionals, and relatively smooth path toward citizenship, which should attract considerable talent. </li>
<li>With the debt brake absent in 2022, the state railway and development bank will borrow big to fund the investment surge, lowering Germany's current account surplus and boosting Eurozone growth. </li>
</ul>


Germany, the EU's most consequential power, now has a "traffic-lights" coalition government with an ambitious agenda for its structural transformation into a green, digitized economy. 
Socially-Liberal policies, including expunging 'race" from the constitution, will allow greater entry of technology professionals, and relatively smooth path toward citizenship, which should attract considerable talent. 
With the debt brake absent in 2022, the state railway and development bank will borrow big to fund the investment surge, lowering Germany's current account surplus and boosting Eurozone growth. 


Germany: Scholz-Led Traffic-Light Coalition to Redefine Left-Wing Pragmatism

Asset Allocation & Fund Positioning, Copley Fund Research

Steven Holden

Asset Allocation & Fund Positioning

Copley Fund Research

Copley Fund Research provide research and data on asset allocation among Global and Emerging Market equity funds.  The analysis details absolute and relative positioning across countries, sectors and industries together with highly granular data on single stock and single fund allocations.  The data is updated monthly with time series going back to January 2011.

Global Research - Analysis of 165 prominent Global equity funds, combined AUM $335bn
GEM Research - Analysis of 127 prominent global EM equity funds, combined AUM $250bn

Asset Allocation - Global and GEM Equity

Thematic (Sector/Industry)

Among active Global investors, EMEA Industrials are the 6th largest regional sector allocation and the largest in the EMEA region, with a 4.80% holding weight on average.  This allocation places EMEA Industrials as the largest regional sector overweight at +2.05% above benchmark (vs MSCI ACWI) with 72.9% of funds holding more than the benchmark weight.Over the last 6-months, cash flows have been among the highest across all Regional Sector groups, with $1bn in net inflows, more buyers than sellers and a marginal uptick in absolute and relative weights.Over the last 6-months, German Industrials stand out as the key recipient of increased levels of positioning, with 4.2% of funds moving to overweight and 3.4% of funds buying in to the sector.Ownership in <a href="https://www.smartkarma.com/entities/deutsche-post-ag" target="_blank" data-smartkarma-citation="entities:21608:1" rel="noopener">Deutsche Post AG (DPW GR)</a> more than doubled from 9.2% in July 2020 to 20.8% today, with every month in between seeing new funds enter the name.  Key holders are RBC, Artemis and Nuveen, all of whom hold north of a 3% allocation.  Over the last 6-months, no closures were registered and instead 2.9% of funds opened positions, led by Cambriar's Global Equity Fund (1.88%) and John Hancock's Global Equity Fund (1.81%).The analysis looks at the positioning of 380 active Global investors with combined AUM of $1.1tr.

Among active Global investors, EMEA Industrials are the 6th largest regional sector allocation and the largest in the EMEA region, with a 4.80% holding weight on average.  This allocation places EMEA Industrials as the largest regional sector overweight at +2.05% above benchmark (vs MSCI ACWI) with 72.9% of funds holding more than the benchmark weight.Over the last 6-months, cash flows have been among the highest across all Regional Sector groups, with $1bn in net inflows, more buyers than sellers and a marginal uptick in absolute and relative weights.Over the last 6-months, German Industrials stand out as the key recipient of increased levels of positioning, with 4.2% of funds moving to overweight and 3.4% of funds buying in to the sector.Ownership in Deutsche Post AG (DPW GR) more than doubled from 9.2% in July 2020 to 20.8% today, with every month in between seeing new funds enter the name.  Key holders are RBC, Artemis and Nuveen, all of whom hold north of a 3% allocation.  Over the last 6-months, no closures were registered and instead 2.9% of funds opened positions, led by Cambriar's Global Equity Fund (1.88%) and John Hancock's Global Equity Fund (1.81%).The analysis looks at the positioning of 380 active Global investors with combined AUM of $1.1tr.

EMEA Industrials: Global Consensus Overweight

Cross Asset Strategy

Over 50% of allocations are in the US with the bulk of the remainder split between Japan, China &amp; HK and the major European nations.  The EMEA overweight is comprised mainly of the UK, Netherlands, France and Germany, with active managers running underweights in the US, China &amp; HK, Australia and Japan.UK allocations hover around their lowest levels in history, though managers remain stubbornly overweight compared to the MSCI AC World index.  A total of 62% of managers are overweight the UK at an average +1.88% above benchmark.  Global Value investors are approaching their largest ever overweight in UK stocks of 3.64% above benchmark.Another month, another slump in Japan exposure.  Average weights in Japan stand at an all-time low of 5.06% with 85.5% of funds exposed (another low). <a href="https://www.smartkarma.com/entities/sony-corp" target="_blank" data-smartkarma-citation="entities:563:1" rel="noopener">Sony Corp (6758 JP)</a> and <a href="https://www.smartkarma.com/entities/kddi-corp" target="_blank" data-smartkarma-citation="entities:639:1" rel="noopener">KDDI Corp (9433 JP)</a> are the most widely held stocks, with 23% and 21% of funds holding a position.Tech exposure is at record highs, though this is matched by a record underweight of -0.47%.  Indeed, the percentage of funds who are overweight technology has fallen to below 50% for the first time since the end of 2018, a sign that Global managers are tilting their portfolios away from Tech.German Industrials allocations have hit a 4-year high as more Global investors add exposure to the sector. <a href="https://www.smartkarma.com/entities/deutsche-post-ag" target="_blank" data-smartkarma-citation="entities:21608:1" rel="noopener">Deutsche Post AG (DPW GR)</a> and <a href="https://www.smartkarma.com/entities/siemens-ag" target="_blank" data-smartkarma-citation="entities:21713:1" rel="noopener">Siemens AG (SIE GR)</a> were the key stocks behind the move, with 4.2% and 2.4% of funds adding exposure over the last 6-months.Alibaba has seen closures by some of the larger holders in our analysis, led by American Funds Capital World Fund (-$1.1bn) and New Economy Fund (-$451m).  Though closures have dominated, selected funds have opened exposure during this period of volatility, including Invesco's Global Focus Fund and Liontrust's Global Income Fund.

Over 50% of allocations are in the US with the bulk of the remainder split between Japan, China &amp; HK and the major European nations.  The EMEA overweight is comprised mainly of the UK, Netherlands, France and Germany, with active managers running underweights in the US, China &amp; HK, Australia and Japan.UK allocations hover around their lowest levels in history, though managers remain stubbornly overweight compared to the MSCI AC World index.  A total of 62% of managers are overweight the UK at an average +1.88% above benchmark.  Global Value investors are approaching their largest ever overweight in UK stocks of 3.64% above benchmark.Another month, another slump in Japan exposure.  Average weights in Japan stand at an all-time low of 5.06% with 85.5% of funds exposed (another low). Sony Corp (6758 JP) and KDDI Corp (9433 JP) are the most widely held stocks, with 23% and 21% of funds holding a position.Tech exposure is at record highs, though this is matched by a record underweight of -0.47%.  Indeed, the percentage of funds who are overweight technology has fallen to below 50% for the first time since the end of 2018, a sign that Global managers are tilting their portfolios away from Tech.German Industrials allocations have hit a 4-year high as more Global investors add exposure to the sector. Deutsche Post AG (DPW GR) and Siemens AG (SIE GR) were the key stocks behind the move, with 4.2% and 2.4% of funds adding exposure over the last 6-months.Alibaba has seen closures by some of the larger holders in our analysis, led by American Funds Capital World Fund (-$1.1bn) and New Economy Fund (-$451m).  Though closures have dominated, selected funds have opened exposure during this period of volatility, including Invesco's Global Focus Fund and Liontrust's Global Income Fund.

Global Fund Positioning Update:  Japan Lows, US Highs, UK Value Rotation, Tencent & Alibaba Exit

Broad global indexes (MSCI ACWI, ACWI ex-US, EAFE, and EM) were able to shrug off recent news of a more contagious Covid variant that popped-up in the UK. Additionally, Covid fears have done nothing to derail ongoing positive market dynamics. As long as support levels hold and market dynamics remain positive, our outlook remains bullish and we continue to view any weakness as a buying opportunity. Actionable Themes in today's report: Services, Technology, Manufacturing, and Materials.

Broad global indexes (MSCI ACWI, ACWI ex-US, EAFE, and EM) were able to shrug off recent news of a more contagious Covid variant that popped-up in the UK. Additionally, Covid fears have done nothing to derail ongoing positive market dynamics. As long as support levels hold and market dynamics remain positive, our outlook remains bullish and we continue to view any weakness as a buying opportunity. Actionable Themes in today's report: Services, Technology, Manufacturing, and Materials.

Global Equity Strategy: Support Levels Holding; Bullish Outlook Intact

Germany

Siemens AG is an engineering and manufacturing company. The Company focuses on areas of electrification, automation, and digitalization. Siemens also provides engineering solutions in automation and control, power, transportation, and medical diagnosis.

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Siemens (SIE GR)

Remain Overweight Europe/UK & Non-US Equities; Pullback Over?; Buys in Industrials and Financials

Remain overweight Europe/UK and non-US equities; we are buyers on pullbacks as long as the FTSE 100 is above 7700, the STOXX Europe 50 is above...

Vermilion Research

Germany: Scholz-Led Traffic-Light Coalition to Redefine Left-Wing Pragmatism

The new coalition will borrow in 2022, & invest in a green, digital transformation over the next 5 years. Germany's large current account surplus...

Prasenjit K. Basu

EMEA Industrials: Global Consensus Overweight

Over the last 6-months, cash flows into EMEA Industrials have been among the highest across all sectors, with inflows of $1bn, more buyers than...

Steven Holden

Global Fund Positioning Update: Japan Lows, US Highs, UK Value Rotation, Tencent & Alibaba Exit

A detailed look at investor positioning among 380 active Global strategies, covering the major themes in country, sector and stock exposure.

Steven Holden

Global Equity Strategy: Support Levels Holding; Bullish Outlook Intact

As long as support levels hold and market dynamics remain positive, our outlook remains bullish and we continue to view any weakness as a buying...

Vermilion Research

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