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

We continue to move increasingly toward the bullish camp and we believe equities are poised for higher prices moving forward. In today’s report we outline our bullish case and highlight attractive Groups and stocks within Financials, Services, Technology and Manufacturing: Credit Card Issuers, Education Services, China, Solar Energy, and Industrial Rental Equipment.

We continue to move increasingly toward the bullish camp and we believe equities are poised for higher prices moving forward. In today’s report we outline our bullish case and highlight attractive Groups and stocks within Financials, Services, Technology and Manufacturing: Credit Card Issuers, Education Services, China, Solar Energy, and Industrial Rental Equipment.

U.S. Equity Strategy: Upgrading Cap-Weighted Communications to Overweight

Research and consultancy, Tabbush Report

Daniel Tabbush

Research and consultancy

Tabbush Report

We provide research and consultancy on Asian banks. Our focus is on what we call “Asian bank research, without the noise.” We are interested in the most critical swing-factors for banks, the NPL and credit cycle, and where we believe there is a gap between perception and reality. We often focus on the less studied components of bank financial statements.  Our research is highly thematic, sometimes examining unlisted banks and companies as a window on mainstream banks. 

Being independent allows us to look at smaller banks, often overlooked by others. Analysis of BIS bank guidelines in the context of Asia, is also a focal point, while we also analyze global banks operating in the region. We use what we believe is the most comprehensive, reliable financials database, SNL Financial. S&P Capital IQ augments our database, with corporate data and CEIC, with economics. 

Asian bank research, without the noise.

Thematic (Sector/Industry)

Nearly half of all reporting US banks and specialty lenders, reported a decline in profit from 3Q18 to 4Q18. Of the 68 companies with populated data in our S&amp;P CIQ database, 30 companies show profit down QoQ. The average decline is 17% QoQ, with <a href="https://www.smartkarma.com/entities/1018" target="_blank" data-smartkarma-citation="entities:1018:1">Bank Of New York Mellon (BK US)</a>, <a href="https://www.smartkarma.com/entities/277" target="_blank" data-smartkarma-citation="entities:277:1">JPMorgan Chase &amp; Co (JPM US)</a>, and <a href="https://www.smartkarma.com/entities/279" target="_blank" data-smartkarma-citation="entities:279:1">Citigroup Inc (C US)</a> included in this group.

Nearly half of all reporting US banks and specialty lenders, reported a decline in profit from 3Q18 to 4Q18. Of the 68 companies with populated data in our S&amp;P CIQ database, 30 companies show profit down QoQ. The average decline is 17% QoQ, with Bank Of New York Mellon (BK US), JPMorgan Chase &amp; Co (JPM US), and Citigroup Inc (C US) included in this group.

Equity Bottom-Up

Often, mainstream banks are the last to show a bad loan cycle. It is usually fringe financial companies that are first to show these stresses. This was the case in the Savings and Loan crisis (S&amp;L) decades ago in the US; in the recent subprime loan crisis in the US with consumer finance companies; and even in Thailand ahead of the Baht devaluation, where finance companies and small fringe banks, were first to reveal stresses. This is why we should not be complacent with results and data from money center banks in the US, and why we must be vigilant in following fringe lenders. This is why the 22% QoQ rise in <a href="https://www.smartkarma.com/entities/14444" target="_blank" data-smartkarma-citation="entities:14444:1">Synchrony Financial (SYF US)</a>'s late loans by 30 days or more is of particular interest. It is against this backdrop that we remain concerned about the state of the US credit cycle. It is not only SYF either, but also other US specialty finance companies.

Often, mainstream banks are the last to show a bad loan cycle. It is usually fringe financial companies that are first to show these stresses. This was the case in the Savings and Loan crisis (S&amp;L) decades ago in the US; in the recent subprime loan crisis in the US with consumer finance companies; and even in Thailand ahead of the Baht devaluation, where finance companies and small fringe banks, were first to reveal stresses. This is why we should not be complacent with results and data from money center banks in the US, and why we must be vigilant in following fringe lenders. This is why the 22% QoQ rise in Synchrony Financial (SYF US)'s late loans by 30 days or more is of particular interest. It is against this backdrop that we remain concerned about the state of the US credit cycle. It is not only SYF either, but also other US specialty finance companies. 

Synchrony Financial – Surge in Late Loans a Harbinger for Banks?

Today's key points:<ul>
<li>Property &amp; Casualty Insurance names are staging price and RS reversal and/or breakouts.</li>
<li>Airlines are staging price and SR reversals to the upside and/or are breaking out.</li>
<li>Railroad related names are breaking out.</li>
<li>We have been bearish on the Semiconductor and Suppliers industry since February; however we are seeing some near term reversals at support levels.</li>
</ul>Highlighted charts: SUP, CMG, LOCO, MCS, EXPE, AMZN, WBA, K, NR, NOV, SLCA, BHGE, OIS, HLX, JPM, WFC, KEY, AXP, AFL, TMK, HSIC, ZBH, OMCL, ANTM, LLY, PFE, AGN, B, WM, ESND, ECHO, and SKYW.

Today's key points:
Property &amp; Casualty Insurance names are staging price and RS reversal and/or breakouts.
Airlines are staging price and SR reversals to the upside and/or are breaking out.
Railroad related names are breaking out.
We have been bearish on the Semiconductor and Suppliers industry since February; however we are seeing some near term reversals at support levels.
Highlighted charts: SUP, CMG, LOCO, MCS, EXPE, AMZN, WBA, K, NR, NOV, SLCA, BHGE, OIS, HLX, JPM, WFC, KEY, AXP, AFL, TMK, HSIC, ZBH, OMCL, ANTM, LLY, PFE, AGN, B, WM, ESND, ECHO, and SKYW.

U.S. Vital Signs - Actionable Charts of the Day

The headline numbers at US banks are wholly misleading if the conclusion is a robust US economy, a robust US consumer and that interest rates will continue to rise a lot. Many banks have seen credit card delinquency rates soar in the past several months, to levels higher than anytime in the past 27 years; this is not making headlines, though. One must scour quarterly reports to see the very real distress contained within US consumer credit portfolios, and mostly with respect to credit cards. Or…

The headline numbers at US banks are wholly misleading if the conclusion is a robust US economy, a robust US consumer and that interest rates will continue to rise a lot. Many banks have seen credit card delinquency rates soar in the past several months, to levels higher than anytime in the past 27 years; this is not making headlines, though. One must scour quarterly reports to see the very real distress contained within US consumer credit portfolios, and mostly with respect to credit cards. Or…

US Banks - Deteriorating Consumer Credit Metrics May Point To Recession

United States

American Express Company is a global payment and travel company. The Company's principal products and services are charge and credit payment card products and travel-related services offered to consumers and businesses around the world.

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American Express Co (AXP US)

U.S. Equity Strategy: Upgrading Cap-Weighted Communications to Overweight

We continue to move increasingly toward the bullish camp and we believe equities are poised for higher prices moving forward. In today’s report we...

Vermilion Research

US Banks - Declining Profit

Nearly half of all reporting US banks and specialty lenders, reported a decline in profit from 3Q18 to 4Q18. Of the 68 companies with populated...

Daniel Tabbush

Synchrony Financial – Surge in Late Loans a Harbinger for Banks?

Often, mainstream banks are the last to show a bad loan cycle. It is usually fringe financial companies that are first to show these stresses. This...

Daniel Tabbush

U.S. Vital Signs - Actionable Charts of the Day

Today's key points: Property & Casualty Insurance names are staging price and RS reversal and/or breakouts. Airlines are staging price and SR...

Vermilion Research

US Banks - Deteriorating Consumer Credit Metrics May Point To Recession

The headline numbers at US banks are wholly misleading if the conclusion is a robust US economy, a robust US consumer and that interest rates will...

Daniel Tabbush

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