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

<ul>
<li>This is now the third Int'l Compass/third week in a row where we are discussing an increasing number of country indexes experiencing bullish 3.5-9-month downtrend reversals.</li>
<li>Importantly, all of the previously mentioned indexes are holding above their breakout levels (i.e., there has yet to be any failed breakouts).</li>
<li>Now, the U.S. dollar (DXY) is starting to show early signs of topping. We continue to believe that global equities are going through a bottoming process.</li>
</ul>


This is now the third Int'l Compass/third week in a row where we are discussing an increasing number of country indexes experiencing bullish 3.5-9-month downtrend reversals.
Importantly, all of the previously mentioned indexes are holding above their breakout levels (i.e., there has yet to be any failed breakouts).
Now, the U.S. dollar (DXY) is starting to show early signs of topping. We continue to believe that global equities are going through a bottoming process.


U.S. Dollar Topping?; Bullish Reversals Continue; Ideas in Growth/Cyclicals, Financials

iShares MSCI ACWI ETF / Technical Analysis

<ul>
<li>Many indexes (ACWI-US,ACWX-US,etc.) are near support, and we could see a bear market bounce, but until these indexes reverse their downtrends and break above resistance levels, we cannot be bullish.</li>
<li>On a positive note, we are starting to see signs that inflation is peaking, as commodity prices have pulled back substantially, and the Energy/Materials Sectors are under significant pressure.</li>
<li>If inflation and commodity prices have indeed peaked, global equities are likely in the early stages of a bottoming process.</li>
</ul>


Many indexes (ACWI-US,ACWX-US,etc.) are near support, and we could see a bear market bounce, but until these indexes reverse their downtrends and break above resistance levels, we cannot be bullish.
On a positive note, we are starting to see signs that inflation is peaking, as commodity prices have pulled back substantially, and the Energy/Materials Sectors are under significant pressure.
If inflation and commodity prices have indeed peaked, global equities are likely in the early stages of a bottoming process.


Inflation Peaking?; ACWI, ACWI Ex-US Near Support; Many Bottoms-Up Stock Recommendations

Japan/Asia Long-Short, LightStream Research

Mio Kato

Japan/Asia Long-Short

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Equity Bottom-Up

<ul>
<li>MMC results beat with revenue at ¥623bn (+4.2% vs. consensus) and OP of ¥31.4bn (+38.4% vs. consensus). </li>
<li>FY23 guidance was also above consensus with revenue of ¥2,290bn (+1.6% vs. consensus at +% YoY) and OP of ¥90bn (+4.7% vs. consensus). </li>
<li>We believe OP guidance is somewhat conservative as volume growth and a weak yen should more than offset raw material costs.</li>
</ul>


MMC results beat with revenue at ¥623bn (+4.2% vs. consensus) and OP of ¥31.4bn (+38.4% vs. consensus). 
FY23 guidance was also above consensus with revenue of ¥2,290bn (+1.6% vs. consensus at +% YoY) and OP of ¥90bn (+4.7% vs. consensus). 
We believe OP guidance is somewhat conservative as volume growth and a weak yen should more than offset raw material costs.


Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>On Friday, a Bloomberg article suggested <a href="https://www.smartkarma.com/entities/renault-sa" target="_blank" data-smartkarma-citation="entities:21536:1" rel="noopener">Renault SA (RNO FP)</a> is considering selling some of its 43% stake in <a href="https://www.smartkarma.com/entities/nissan-motor-co-ltd" target="_blank" data-smartkarma-citation="entities:72:1" rel="noopener">Nissan Motor (7201 JP)</a> to help fund its efforts in EVs.</li>
<li>Sources were "people familiar with the matter." Since 2018, Bloomberg and Les Echos have been the outlets which do "scoops" on the Renault/Nissan relationship, but they are not always right.</li>
<li>However, it raises some interesting questions and possibilities. And given the prices, it makes the decision somewhat uncomfortable for both. </li>
</ul>


On Friday, a Bloomberg article suggested Renault SA (RNO FP) is considering selling some of its 43% stake in Nissan Motor (7201 JP) to help fund its efforts in EVs.
Sources were "people familiar with the matter." Since 2018, Bloomberg and Les Echos have been the outlets which do "scoops" on the Renault/Nissan relationship, but they are not always right.
However, it raises some interesting questions and possibilities. And given the prices, it makes the decision somewhat uncomfortable for both. 


Renault (RNO FP) To Sell Nissan (7201 JP) Shares? Not Yet, and Not Yet Positive Nissan.

<ul>
<li>The Nikkei is now down 9.57% vs. when we first recommended our skew trade (now up 0.40%). </li>
<li>Despite some frustrating idiosyncratic moves which have prevented the skew trade from outperforming more it has mostly held up. </li>
<li>Looking forward, we believe it is worthwhile assessing upside and downside macro risks for the components of the trade.</li>
</ul>


The Nikkei is now down 9.57% vs. when we first recommended our skew trade (now up 0.40%). 
Despite some frustrating idiosyncratic moves which have prevented the skew trade from outperforming more it has mostly held up. 
Looking forward, we believe it is worthwhile assessing upside and downside macro risks for the components of the trade.


TOPIX-Nikkei Skew Trade – Updates Factoring in Ukraine

Japan

Mazda Motor Corporation manufactures and sells automobiles, trucks, auto parts, and its accessories.  The Company operates its business worldwide.

NISSAN SHATAI CO., LTD. develops, designs, and assembles automobiles including sedans, Recreational Vehicles(RV), station wagons, and buses for Nissan Motor. The Company also manufactures parts for motor vehicles.

The Yokohama Rubber Company Limited produces rubber products including automobile tires, tubes, and conveyor belt for industrial use.  The Company also produces golf clubs and passenger aircraft parts such as restroom units and tanks for drinking water.

KOITO MANUFACTURING CO., LTD. produces lighting equipments for automobiles such as head and tail lights, rear combination lamps, and fog lamps.  The Company has  its production facilities in Japan, the US, the UK, Czech, China, Thailand, Taiwan, and India.  Koito Manufacturing also manufactures electronics parts for aircrafts including lighting equipments and oil pressure gauges.

Stanley Electric Co., Ltd. manufactures lighting equipment including head lights, HID (High Intensity Discharge) assist lamps, and rear combination lamps for automobiles.  The Company also produces LCD (Liquid Cristal Display) and LED (Light Emitted Diode) lamps for communication equipment, office automation equipment, and information displays.

NGK SPARK PLUG Co., Ltd. manufactures and markets spark plugs for automobiles, motorcycles, agricultural machinery, ships, and aircrafts.  The Company also makes ceramic products for semiconductor and telecommunication equipment. NGK Spark Plug markets its products under the NGK and NTK brand names and has subsidiaries in the US, Canada, France, Germany, and South Korea.

NIFCO INC. manufactures synthetic resinous fasteners and plastic components for automobiles and home electronic appliances.  The Company has its subsidiaries in Korea, Hong Kong, Australia, Malaysia, Singapore, and the US.

NOK CORPORATION manufactures oil seals and industrial rubber products for automobiles.  The Company also produces electronic equipment used for cellular phones and PCs.  NOK has production facilities in Taiwan and Thailand.

Sumitomo Rubber Industries, Ltd. manufactures automobile and motorcycle tires, industrial rubber products and sports equipment.  The Company's products include golf balls, tennis rackets, rubber gloves, and artificial turf. Sumitomo Rubber sells its products under Dunlop brand around the world.

Toyo Tire Corporation manufactures and markets rubber and chemical goods.  The Company's products include motor vehicle tires, aluminum alloy wheels, office equipment parts, heat resistant board, and automobile parts such as bumpers and air bag systems.  Toyo Tire & Rubber has its  subsidiaries in the  US, Australia, Canada, Germany, and China.

Harley-Davidson, Inc. designs, manufactures, and sells motorcycles.  The Company's products include heavyweight touring, custom, and performance motorcycles, as well as a line of motorcycle parts, accessories, and general merchandise.  Harley-Davidson also provides motorcycle floor planning and parts and accessories financing to its North American and European dealers.

FAW Jiefang Group Co., Ltd, through joint ventures, manufactures and markets cars and auto parts.  The Company produces automobiles, transmission systems, and engines.  FAW Car also provides auto repair and customizing services.

Guangzhou Automobile Group Company, Ltd. manufactures, sells, and services automobiles. The Company is also involved in automobile parts and components, and auto finance and related services for both overseas and domestic markets.

Chongqing Changan Automobile Company Limited develops, manufactures, and markets mini cars, mini sedans, full size sedans, and engines.

Chongqing Changan Automobile Company (200625 CH)

Thor Industries, Inc. produces and sells a wide range of recreation vehicles.  The Company markets its products through independent dealers located throughout the United States and Canada.  Thor's products are sold under the Airstream Classic, Dutchmen, Skamper, Infinity, Four Winds, Citation, Signature, and other names.

Anhui Jianghuai Automobile Co., Ltd. manufactures and markets bus and truck chassis, gear boxes, other auto parts, and business automobiles.

Yadea Group is a leading electric two wheeler brand in China. The company produces electric bikes and scooters.

Tofas Turk Otomobil Fabrikasi AS manufactures cars and automobile parts under license from Fiat.  The Group also imports Alfa Romeo and Fiat cars for domestic market and provides financing services.

BAIC Motor Corporation Limited designs, researches, develops, manufactures and sells a variety of passenger vehicles in China.

Brilliance China Automotive Holdings Limited, through its subsidiaries, manufactures and distributes minibuses and sedans in the People's Republic of China.  The Company also manufactures and trades automotive components.

MITSUBISHI MOTORS CORPORATION develops and manufactures passenger cars and its related parts.  The Company has production facilities in Japan, the US, and Thailand.  Mitsubishi Motors Corp provides vehicle-related financing and leasing service through its subsidiary.

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Mitsubishi Motors (7211 JP)

U.S. Dollar Topping?; Bullish Reversals Continue; Ideas in Growth/Cyclicals, Financials

This is now the third week in a row where we are discussing an increasing number of country indexes with bullish 3.5-9-month downtrend reversals,...

Vermilion Research

Inflation Peaking?; ACWI, ACWI Ex-US Near Support; Many Bottoms-Up Stock Recommendations

We're starting to see signs that inflation is peaking, as commodity prices have pulled back substantially or are breaking, and the Energy $XLE and...

Vermilion Research

Mitsubishi Motors – Could Get Squeezy

Mitsubishi Motors' results were bang in line with our previous estimates but noticeably above consensus while guidance was strong. Still not well...

Mio Kato

Renault (RNO FP) To Sell Nissan (7201 JP) Shares? Not Yet, and Not Yet Positive Nissan.

On Friday, the French state announced an arrest warrant for Carlos Ghosn, and the Q1 call was full of vague talk of Alliance changes not yet...

Travis Lundy

TOPIX-Nikkei Skew Trade – Updates Factoring in Ukraine

The Nikkei is down 9.57% vs. when we initiated our skew trade (now up 0.40%). Despite some frustrating idiosyncratic moves the trade has mostly...

Mio Kato

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