Author: Tristan d'Aboville

Tristan d’Aboville is an Executive Director, Research Analyst, managing the European Research Product. Mr. d’Aboville has more than 16 years of experience in equity research and sales. Since joining the firm in 2012, he has applied his client-centric style with analysts and portfolio managers, anticipating and exceeding their needs. He writes the well-received weekly European commentary, and follows it with a client conference call to discuss findings. Prior to William O’Neil + Co., Mr. d’Aboville was a top-producing salesperson at Kepler Capital Markets, formerly known as Julius Baer, and at Natixis Bleichroeder, covering European equities for large U.S. institutional clients. He started his career as an equity analyst at Aurel-BGC, later moving to Natixis Bleichroeder, where he became the lead analyst for the European Hotels, Leisure and Catering Sector. He was recognized as a Top Analyst for Predictability & Recommendations by AQ Publications in 2003. Extel named him one of the top three European analysts covering the business services and hotel & leisure industries. Prior to the securities industry, Mr. D’Aboville was an auditor with Arthur Anderson. Mr. d’Aboville earned a Master of Science in Managerial and Financial Economics from ISC Paris School of Management. Later, he studied Global Affairs at New York University. He is a Certified International Investment Analyst (CIIA). A sportif, Mr. d’Aboville enjoys kite surfing, sailing, skiing, tennis, chess, and spending as much of his free time as possible with his wife, young daughter, and son.

European Weekly Summary

Posted on by Tristan d'Aboville

Key points from this week’s report:

Please refer to the attached PDF for the full report.

 

Key points:

  • The Stoxx 600 declined 2.4% last week, breaching its 50-DMA for the first time since April. Markets are experiencing high volatility following the European Parliament elections. With the breach of the 50-DMA, the Stoxx 600 was shifted down to an Uptrend Under Pressure. The next level of support is at the 100-DMA (1.1% below).
  • Out of the 16 key indices we cover in the region, 10 are in a Downtrend. Distribution rose to 4.3. Due to the pullback, we are seeing dwindling leadership across Europe, with the number of stocks breaking out nosediving from mid-May levels while there has been a sharp increase in failed bases. We recommend investors reduce positions in names that are breaking below logical levels of support.
  • All sectors shed their gains last week, with transportation, discretionary, and banking stocks suffering the most losses. Defensive sectors, such as Health Care and Staple, are gaining short-term momentum on a relative basis. Within the Financial space, Banks (Stoxx 600 Banks; EXV1.DE) declined over 5.5% and fell below the 50-DMA for the first time since February. The Italian FTSE MIB and the French CAC40 are heavily weighted toward banking; hence, they were the worst performers on Friday, declining 281 bps and 266 bps, respectively. The CAC40, already in a Correction, continues to trend downward and has broken below its 200-DMA. The FSTE MIB breached its 100-DMA on heavy volume and was downgraded to a Correction. 
  • European Focus List Update:

European Weekly Summary

Posted on by Tristan d'Aboville

Key points from this week’s report:

Please refer to the attached PDF for the full report.

 

  • European markets remained constructive last week, with the Stoxx 600 reaching an all-time intraday high. The Netherlands, Denmark, and Switzerland exhibited strong positive momentum and made fresh 52-week highs. Overall, we remain positive on the market but recommend monitoring distributions in the coming weeks following European elections this weekend, which show the rise of the far right. Political uncertainties could lead to a short-term pullback; for the Stoxx 600, watch the short-term supports at its 50-DMA (1.4% below today’s price).
  • Sectors closed mixed last week. Technology, Healthcare, and Consumer Staple led the gains, while Energy and Basic Material lagged the most. On our rotation graph, performance broadly shows fading short-term momentum among sectors. However, Consumer Staple was an outlier, with short-term momentum improving, while Technology is showing early signs of improvement after deteriorating abruptly for several weeks. 
  • Sector Score Cards – Stocks of Interest (Top-rated names with best technical setups – refer pages 9–20):
    • Consumer Disc./Retail: Inditex (IND.ES, FL constituent), Michelin (MCL.FR).
    • Consumer staple: Beiersdorf (BEIX.DE, FL constituent), Unilever (ULVR.GB), L’Oreal (OR@F.FR).
    • Financial: Talanx (TLXX.DE, FL constituent), Swissquote (SQN.CH, FL constituent).
    • Healthcare: Camurus (CAMX.SE, FL constituent), Ipsen (IPN.FR).
    • Technology: ASML (AML.NL, FL constituent), Logitech (LOGN.CH), Elmos Semi. (ELGX.DE), Nemetschek (NEMX.DE, FL constituent). 
  • European Focus List update:

European Weekly Summary

Posted on by Tristan d'Aboville

Key points from this week’s report:

Please refer to the attached PDF for the full report.

 

  • European markets pulled back to the 50-DMA, before bouncing off and attempting to reclaim their converging near-term moving averages – 10- and 21-DMA. Markets are treading water ahead of the European Central Bank’s interest rate decision on Thursday. Over the past week, Transportation, Energy, and Utility were the bright spots in the market, while rest of the sectors gave up gains or closed flat.
  • With the broader Stoxx 600 in a Confirmed Uptrend, we continue to be positive on the market. We recommend that investors be selective while adding positions in leading names, which are breaking out of proper bases post earnings.
  • On our rotation charts, Capital Equipment remained in the best quadrant. Transportation and Health Care gained momentum in the recent weeks. Due to the slump during the past week, Technology, along with Consumer Cyclical, is witnessing momentum faltering abruptly. Retail and Finance have started showing signs of weakness.

 

  • Sector Score Cards – Stocks of Interest (Top-rated names with best technical setups – refer pages 9–20):

 

  • European Focus List Update:
    • Addition: NKT (NKT.DK).
    • Removal: Flutter Entertainment (FLTR.GB).

O’Neil Consumer/Retail Weekly

Posted on by Tristan d'Aboville

Consumer Staples (XLP): The index declined 2.1% in the past week, breaching support of its 10-DMA (2% above) and 21-DMA (1%
above). It is now testing support at its 50-DMA. We recommend investors wait for the index to decisively reclaim its near-term moving
averages and hold above the $78 level before turning constructive.

European Weekly Summary

Posted on by Tristan d'Aboville

Key points from this week’s report:

Please refer to the attached PDF for the full report.

 

  • The Stoxx 600 continued its ascent, reinforcing the strength in the European markets, gaining as much as 76 bps till Wednesday before paring some gains on Thursday and Friday. The index is now extended from its moving averages. Its 10-DMA is 77 bps below, and the following 21-DMA is 219 bps below. We expect the pullback to continue in the near term while the short-term moving averages catch up after the U.S. saw a sticky CPI print for April. Markets are pricing in an earnings boost to bond-sensitive sectors when the Federal Reserve pivots from its hawkish stance.
  • Most sectors closed in the green except Energy and Capital Equipment. Financial, Technology, and Transportation led the gains, while Energy and Capital Equipment lagged the most. On our rotation graph, sectoral performance is broadly positive. Financial, Health Care, and Transportation have joined Capital Equipment stocks in the best quadrant, displaying strong momentum. Technology and discretionary categories of consumer cyclical and retail are under pressure and depict lagging momentum on the charts.
  • Sector Score Cards – Stocks of Interest (Top-rated names with best technical setups – refer pages 9–20):
    • Basic Material: Givaudan (GIVN.CH).
    • Capital Equipment: Ipsos (IPS.FR).
    • Financial: Real Estate: Vonovia (VNAX.DE), Catena (CATE.SE) / Financial Services: Experian (EXPN.GB).
    • Health Care: Bachem (BANB.CH, EFL Constituent), Ambu (AMB.DK).
    • Retail: Next (NXT.GB).
    • Technology: Stocks forming the right side of a base: Infineon (IFXX.DE), Logitech (LOGN.CH), and Amadeus (AMS.IT).
    • Utilities: Fortum (FORT.FI).
  • European Focus List Update:

European Weekly Summary

Posted on by Tristan d'Aboville

Key points from this week’s report:

Please refer to the attached PDF for the full report.

 

  • The Stoxx 600 was shifted to a Confirmed Uptrend last week as the index hit fresh highs. It inched more than 300 bps higher for the week, driven by Utility, Insurance, and Construction stocks. Autos was the only sector that ended in the red as key original equipment manufacturers reported poor earnings. The index is now trading ~3% above its 50-DMA and ~10% from its 200-DMA. It is extended in the short term. We expect a short-term pullback toward its rising 10-DMA (2% below) before the release of key U.S. PPI and CPI data on Tuesday and Wednesday, respectively.
  • On our rotation graph, most sectors are exhibiting improvement in their short-term momentum. Leading over 26-weeks, Capital Equipment is showing further strength. Energy, Financial, Basic Material, Transportation, Health Care, Utility, and Retail have been showing strong improvement in their short-term momentum. Only Technology and Consumer Cyclical continue to have deteriorating short-term momentum.
  • Sector Score Cards – Stocks of Interest (Top-rated names with best technical setups – refer pages 9–20): As breadth improved in the past week, the number of breakouts in Europe increased significantly. The best-rated names based on our fundamental ratings and rankings that broke out include:
  • European Focus List update:
    • Actionable names include Beiersdorf (BEIX.DE), Swissquote (SQN.CH), and Safran (SGM.FR).
    • Addition: None.
    • Removal: None.

O’Neil Consumer/Retail Weekly

Posted on by Tristan d'Aboville

Consumer Staples (XLP): The index continues to trade constructively. It gapped up on high volume to break above $76.5. On the
weekly charts, it broke out of a stage-one, 5-week long consolidation on good volume. Major constituents like Procter & Gamble (PG),
Costco (COST), Walmart (WMT) are all trading constructively. RS line however continues to trend downward with weak technical
ratings.

European Weekly Summary

Posted on by Tristan d'Aboville

Key points from this week’s report:

Please refer to the attached PDF for the full report.

 

Key points:

  • European markets pulled back to their 50-DMA over the past week. The indices retreated 75 bps after the rally in the prior week as investors digested Q1 earnings along with commentary from the central banks. The Stoxx 600 is in a Rally Attempt and is still trading 2% off highs, with strong support from its near-term moving averages. Immediate support is at 503, which has been a reliable level for the index.
  • Most sectors declined last week, while Financial Services, Utility, and Travel & Leisure gained. Autos was the worst-affected sector, slipping 3.5% as giants Volkswagen, Mercedes-Benz, and Stellantis posted lower sales on sluggish demand last week. On our rotation charts, Utility, Energy, Transportation, Financial, Capital Equipment, Retail, and Health Care showed strength in the near term.
  • Sector Score Cards – Stocks of Interest (Top-rated names with best technical setups – refer pages 9–20):
  • Capital Equipment: Rexel (RXL.FR), JCDecaux (DEC.FR).
  • Consumer Cyclical: Michelin (MCL.FR).
  • Consumer staples: Premier Food (PFD.GB).
  • Financials: Bure Equity (BURE.SE), Standard Chartered (STAN.GB).
  • European Focus List update:
    • Addition: None.
    • Removal: Straumann Holding (STMN.CH).

Actionable Names: Universal Music Group (UNMG.NL), Swissquote (SQN.CH), and Vat Group (VACN.CH).