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

In our October International Strategy, we provide a synopsis on current market conditions around the globe, and explore the following themes in further detail:<ul>
<li>Supporting our cautious outlook, cyclical and growth Sectors are breaking down on the international front - namely Technology and Consumer Discretionary.  </li>
<li>Overweight Norway.</li>
<li>Price support holding in Japan as RS improves. </li>
<li>Health Care remains attractive, especially defensive pharma Groups within Japan and Europe.</li>
</ul>

In our October International Strategy, we provide a synopsis on current market conditions around the globe, and explore the following themes in further detail:
Supporting our cautious outlook, cyclical and growth Sectors are breaking down on the international front - namely Technology and Consumer Discretionary.  
Overweight Norway.
Price support holding in Japan as RS improves. 
Health Care remains attractive, especially defensive pharma Groups within Japan and Europe.


Global Equity Strategy: Market Deterioration Continues; Cyclical & Growth Sectors Breaking Down

Chief Economist, Heteronomics

Phil Rush

Chief Economist

Heteronomics

Heteronomics represents a different kind of economics. We believe analysis should delve into the details of what is really going on, rather than using overly simplistic assumptions to quick-sell stories. Independence from myopic institutional pressures allows us to focus on the realities underlying your asset allocation decisions, without the conflicts of the old market structures. Heteronomics targets the themes driving UK asset prices, offering the benefits of depth, independence and ultimately price.

UK-centric macro research

Macroeconomics

<ul>
<li>UK retail sales were a little disappointing in September by falling 0.8% m-o-m, but this was merely a quicker than expected snap back to its still-brisk trend.</li>
<li>I continue to forecast 3Q18 GDP growth of 0.6% q-o-q, which would be a bullish surprise to the BoE. Some of the increase is probably at the expense of 4Q18.</li>
</ul>


UK retail sales were a little disappointing in September by falling 0.8% m-o-m, but this was merely a quicker than expected snap back to its still-brisk trend.
I continue to forecast 3Q18 GDP growth of 0.6% q-o-q, which would be a bullish surprise to the BoE. Some of the increase is probably at the expense of 4Q18.


FLASH: UK Sales Snap Back Down to Trend in Sep-18

<ul>
<li>UK inflation disappointed almost all expectations, including my below consensus ones, by slowing to 2.4% on the CPI and 3.3% on the RPI in September. Clothing was mostly responsible again, but food prices were also soft.</li>
<li>Most of the shock doesn’t carry into my October forecast, and my year-end projections are slightly higher than last week. I expect a slight rise in October before grinding toward a still above-target low in Jan-19.</li>
<li>Brisk domestic price and wage inflation continue to support the rate hiking cycle, but guidance on that is likely to be limited until the increasingly tense negotiations on EU withdrawal conclude.</li>
</ul>


UK inflation disappointed almost all expectations, including my below consensus ones, by slowing to 2.4% on the CPI and 3.3% on the RPI in September. Clothing was mostly responsible again, but food prices were also soft.
Most of the shock doesn’t carry into my October forecast, and my year-end projections are slightly higher than last week. I expect a slight rise in October before grinding toward a still above-target low in Jan-19.
Brisk domestic price and wage inflation continue to support the rate hiking cycle, but guidance on that is likely to be limited until the increasingly tense negotiations on EU withdrawal conclude.


FLASH: Disinflationary UK Surprise in Sep-18

<ul>
<li>The unemployment rate remained at 4.0% in August, as expected, while employment contracted marginally amid stagnant labour force growth.</li>
<li>Average hours worked rebounded back to its 2018-high, normalising the difference from usual hours in the process, which suggests its sustainable.</li>
<li>Wage growth is supported by hours normalising higher. A brisk August after an upwardly revised July lifted the ex-bonus headline to 3.1% y-o-y 3mma. Total pay is tracking growth of 2.75% for 4Q18, whereas the BoE only forecast 2.5%.</li>
</ul>


The unemployment rate remained at 4.0% in August, as expected, while employment contracted marginally amid stagnant labour force growth.
Average hours worked rebounded back to its 2018-high, normalising the difference from usual hours in the process, which suggests its sustainable.
Wage growth is supported by hours normalising higher. A brisk August after an upwardly revised July lifted the ex-bonus headline to 3.1% y-o-y 3mma. Total pay is tracking growth of 2.75% for 4Q18, whereas the BoE only forecast 2.5%.


FLASH: Hawkish UK Hours and Wages in Aug-18

<ul>
<li>Tuesday’s UK labour market report should be a story of bullish stability, with the UR at 4.0% and wage growth at 2.9%. Both remain on improving trends.</li>
<li>I expect UK inflation to disappoint market expectations by falling from 2.65% to 2.5% on the CPI in Sep-18 while my RPI forecast sits uncomfortably close to rounding even lower than 3.4%. Shifting seasonals support another downside surprise.</li>
</ul>


Tuesday’s UK labour market report should be a story of bullish stability, with the UR at 4.0% and wage growth at 2.9%. Both remain on improving trends.
I expect UK inflation to disappoint market expectations by falling from 2.65% to 2.5% on the CPI in Sep-18 while my RPI forecast sits uncomfortably close to rounding even lower than 3.4%. Shifting seasonals support another downside surprise.


Preview: UK Sep-18 Inflation and Aug Labour Market

United Kingdom

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Global Equity Strategy: Market Deterioration Continues; Cyclical & Growth Sectors Breaking Down

In our October International Strategy, we provide a synopsis on current market conditions around the globe, and explore the following themes in...

Vermilion Research

FLASH: UK Sales Snap Back Down to Trend in Sep-18

UK retail sales were a little disappointing in September by falling 0.8% m-o-m, but this was merely a quicker than expected snap back to its...

Phil Rush

FLASH: Disinflationary UK Surprise in Sep-18

UK inflation disappointed almost all expectations, including my below consensus ones, by slowing to 2.4% on the CPI and 3.3% on the RPI in...

Phil Rush

FLASH: Hawkish UK Hours and Wages in Aug-18

The unemployment rate remained at 4.0% in August, as expected, while employment contracted marginally amid stagnant labour force growth. Average...

Phil Rush

Preview: UK Sep-18 Inflation and Aug Labour Market

Tuesday’s UK labour market report should be a story of bullish stability, with the UR at 4.0% and wage growth at 2.9%. Both remain on improving...

Phil Rush