Q1 GDP missed consensus and showed first contraction since 2022: Per final estimates, the U.S.
economy contracted 0.5% y/y in Q1, lower than estimates of 0.2% y/y decline and reversing from 2.4%
y/y growth in Q4 FY24. Consumer spending rose 0.5%, marking the slowest growth since 2020. Federal
government spending dropped 4.6% y/y while fixed investment rose 7.6% y/y, the fastest since
mid-2023z
Author: Deepashree MC
Won Global View
The U.S. market is in a Confirmed Uptrend. On Friday, the S&P 500 and Nasdaq gained 52bps each and closed above their prior alltime highs, for the first break to highs in four months. Support is at the rising 21-DMA (6,007/19,567), which indices are ~3–4% extended
from. The distribution day count stands at four and three, respectively, with one expiring on the Nasdaq today after market close.
Won Europe Today
Ishares DJ Stoxx600 (EXSA.DE)
On Friday,
- European markets ended higher, notching their first weekly gain in three weeks. Optimism around a potential easing in the U.S.-China trade dispute boosted risk appetite, especially among automakers. As tensions in the Middle East eased, investor focus turned to global trade talks, with hopes of progress ahead of the early July deadline for new U.S. tariff hikes.
- The Stoxx 600 bounced off more than 1% after finding support at its converging 50- and 100-DMA.The index has near-term resistance at its 21-DMA. We recommend a selective approach to adding names on a high-volume breakout or decisive retake of their key moving averages.
- Among significant movers on the Stoxx 600, shares of British sports retailer JD Sports (JD.GB; JD/:LN) rose 7.5% following a better-than-expected Q1 guidance by its U.S. peer Nike (NKE). Meanwhile, shares of Porche AG (P911X.DE; P911:GR) closed 7.6% higher after the carmaker decided to sell its consulting and IT services business, which is valued at more than €1B.
- Most sectors closed in positive territory, with Automobiles (+413bps) and Banks (+164bps) leading the gains. Utility was the sole outlier (-17bps).
- Among major indices, France’s CAC 40 recovered after making losses in the past couple of sessions and closed 1.8% higher. The index reclaimed its 200-DMA and was facing resistance at its converging 21- and 50-DMA. Germany’s DAX 30 found support at its 10-DMA and closed 1.7% higher, retaking its 21-DMA. It was trading above all its key moving averages. The U.K.’s FTSE 100 closed 0.7% higher and retook its 10-DMA, with immediate resistance at its 21-DMA.
- Sweden was upgraded to a Confirmed Uptrend from a Rally Attempt as the index recorded a follow-through day. Denmark recorded Day 1 of its rally attempt.
- All the 16 indices we track closed in the green. Four are in a Confirmed Uptrend, five in a Rally Attempt, one in a Downtrend, and six in an Uptrend Under Pressure. The average distribution day count stands at 3.5.
- All the 23 European Focus List names are trading above their 200-DMA, while 17 ideas are trading above their 50-DMA.
- Actionable names in the European Focus List are Alk-Abello B (ALK.DK; ALKB:DC), Odfjell Drilling (ODDR.NO; ODL:NO), Safran (SGM.FR; SAF:FP), Medicover B (MEDI.SE; MCOVB:SS), and Bawag Group (BWGP.AT; BG:AV).
Won Europe Today
We released our Weekly Global Laggards Report today. Click here to access the report. The stocks highlighted in this report are laggards relative to their own domestic markets. We recommend that they be underweighted as they may be vulnerable to further downside risk and underperformance. European stocks include Rio Tinto (RIO.GB; RIO:LN), Alfa Laval (ALF.SE; ALFA:SS), and Essity B (ESSI.SE; ESSITYB:SS).
Won Global View
The U.S. market remains in a Confirmed Uptrend. The S&P 500 and Nasdaq gained 80–100bps on higher d/d volume. Next resistance
is at their all-time high (6,147/20,205), and support is at the rising 21-DMA (5,990/19,496). The distribution day count stands at four and
three, respectively, after one day expired on each index yesterday after market close.
Won Europe Today
Yesterday,
- European markets closed lower as investor optimism was dampened by worries about the fragile Israel-Iran ceasefire, despite indications of progress in U.S.-led diplomatic efforts. Concerns about new trade tensions are growing as attention shifts to the July 8 deadline for the U.S. tariff pause. With the EU working to advance trade negotiations, aside from a limited agreement with the U.K., uncertainty surrounding potential tariff changes is emerging as a significant risk factor for European equity markets.
- Among key movers on the Stoxx 600, shares of Stellantis (STL.IT; STLAM:IM) gained 3% after Jefferies raised its rating on the stock to “buy” from “hold”. Meanwhile, shares of Babcock (BAB.GB; BAB:LN) rose 10.7% after the company raised its medium-term growth outlook.
- The Stoxx 600 hit resistance at its declining 10-DMA and ended the session 0.7% lower, breaching its 50- and 100-DMA. Next support is at its 200-DMA (-1.7%). We recommend a selective approach to adding names on a high-volume breakout or decisive retake of their key moving averages.
- Among sectors, Food & Beverages (-242bps), Telecommunications (-173bps), and Chemicals (-145bps) lagged the most. Automobiles and Parts (+38bps) and Financial Services (+2bps) were the sole gainers.
- Among major indices, France’s CAC 40 hit resistance at its 200-DMA and closed 0.8% lower. It continued to trade below all its key moving averages. Support is at its June low (-0.7%). Germany’s DAX 30 hit resistance at its 21-DMA and fell 0.6%. It was testing support at its 10-DMA. Next support is at its 50-DMA (-0.6%). The U.K.’s FTSE 100 also ended the session 0.5% lower after hitting resistance at its 21-DMA. Support is at its 50-DMA (-0.8%), followed by its 100-DMA (-1.2%).
- All the 16 markets we track closed in the red. Three are in a Confirmed Uptrend, six in an Uptrend Under Pressure, three in a Rally Attempt, and four in a Downtrend.
- The Stoxx 600 was shifted to a Rally Attempt from a Downtrend.
- Ireland recorded its seventh distribution day. The average distribution day count stood at 4.33.
- All 23 European Focus List names are trading above their 200-DMA, while 16 names are trading above their 50-DMA.
- Actionable names in the Focus List include Alk-Abello B (ALK.DK; ALKB:DC), Odfjell Drilling (ODDR.NO; ODL:NO), Bawag Group (BWGP.AT; BG:AV), and Safran (SGM.FR; SAF:FP).
Won Global View
The U.S. market remains in a Confirmed Uptrend. The S&P 500 closed flat, while the Nasdaq gained 30bps. Next resistance is at an
all-time high (6,147/ 20,205), with support at the rising 21-DMA (5,975/19,429). The distribution day count stands at five and four,
respectively, after one day expired on the S&P 500 yesterday after the close. One distribution day is set to expire on each index today after
the close.
Won Europe Today
Yesterday,
- European stocks rose sharply following a ceasefire between Israel and Iran, which eased geopolitical tensions. Energy stocks underperformed as oil prices fell 5% amid decreased risk to the Strait of Hormuz. Meanwhile, travel and airline shares surged sharply. Investors are now focused on the upcoming U.S. tariff-pause deadline on July 8, as the EU works to finalize trade deals, though meaningful progress has been limited so far.
- Among key movers on the Stoxx 600, shares of Alstom (ALOT.FR; ALO:FP) surged 7.7% after the company received a €1.7B contract to deliver 96 next-gen trainsets in France.
- The Stoxx 600 booked a gain of 1.1% and reclaimed its 50- and 100-DMA. Next resistance is at its 21-DMA (+1%). We recommend a selective approach to adding names on a high-volume breakout or decisive retake of their key moving averages.
- Among sectors, Travel & Leisure (+409bps), Banks (+312bps), and Technology (+189bps) were the top gainers. Oil & Gas (-250bps) was the sole decliner.
- Among major indices, France’s CAC 40 gained 1% and tested resistance at its 50- and 200-DMA. It continued to trade below all its key moving averages. Immediate resistance is at its 200-DMA (+0.3%). Germany’s DAX 30 closed 1.7% higher and reclaimed its 10-DMA. Next resistance is at its 21-DMA (+0.8%). The U.K.’s FTSE 100 ended the session flat after hitting resistance at its short-term moving averages. Support is at the confluence of its 50- and 100-DMA (-1.6%).
- Fourteen of the 16 markets we track closed in the green. Three are in a Confirmed Uptrend, six in an Uptrend Under Pressure, two in a Rally Attempt, and five in a Downtrend.
- Norway recorded its first distribution day. The average distribution day count stood at 4.44.
- All the 23 European Focus List names are trading above their 200-DMA, while 17 names are trading above their 50-DMA.
- Actionable names in the Focus List include Alk-Abello B (ALK.DK; ALKB:DC), Odfjell Drilling (ODDR.NO; ODL:NO), Bawag Group (BWGP.AT; BG:AV), and Safran (SGM.FR; SAF:FP).
Won Global View
The U.S. market remains in a Confirmed Uptrend. The S&P 500 and Nasdaq closed 1.1–1.4% higher, clearing above recent highs
(6,060/ 19,800). Next resistance is at an all-time high (6,147/ 20,205) and support is at the rising 21-DMA (5,963/ 19,375). The distribution
day count remains at six and four, respectively. However, one day is set to expire on the S&P 500 today after the close and one will expire
on both indices tomorrow after the close.
Won Europe Today
We released our European Weekly Summary yesterday. Click here to access the full report. Key points from it include:
- Last week, most European markets ended lower, with Denmark seeing a steep decline of about 6%. Ireland, Italy, and Switzerland also saw declines of more than 2%. On the other hand, Finland recorded slight gains and Norway rose almost 1% to a 52-week high. Many indices have declined below their 21-DMA and are approaching support at their 50-DMA, with market trends showing increasing pressure.
- All sectors declined during the week, except Energy (+1.3%). Health Care (-3.9%) led the losses, followed by Transportation (-2.6%). The remaining sectors fell 1–2%.
- We are growing more cautious on European markets as key indices have fallen below their initial support levels and breakout activity has declined sharply, with more failed breakouts. Increased tensions in the Middle East, particularly the possibility of Iran blocking the Strait of Hormuz, could worsen the current downtrend in earnings. Banks appear to be particularly vulnerable. However, if volatility continues, investors may become more interested in defensive sectors.
