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

And just like that, the S&amp;P 500, Nasdaq, and the Dow have reclaimed new highs despite ongoing coronavirus concerns, as a buy the dip strategy has paid off. Primarily responsible for new highs in these indexes is Technology (esp. software and semis/semi suppliers) and FAANG stocks. While these areas all remain bullish, we still have some reservations due to the massive disparity in performance between them and the Materials (XLB, XME) and Energy (RYE) Sectors, and also small-caps (IWM) which continue to hit new RS lows. In today’s report we highlight attractive Groups and stocks within Consumer Discretionary and Financials: Homebuilding, Large-Cap, Casinos &amp; Gaming, Small-Cap, Asset Management &amp; Custody Banks, Large-Cap, and Investment Banking &amp; Brokerage, Small-Cap.

And just like that, the S&amp;P 500, Nasdaq, and the Dow have reclaimed new highs despite ongoing coronavirus concerns, as a buy the dip strategy has paid off. Primarily responsible for new highs in these indexes is Technology (esp. software and semis/semi suppliers) and FAANG stocks. While these areas all remain bullish, we still have some reservations due to the massive disparity in performance between them and the Materials (XLB, XME) and Energy (RYE) Sectors, and also small-caps (IWM) which continue to hit new RS lows. In today’s report we highlight attractive Groups and stocks within Consumer Discretionary and Financials: Homebuilding, Large-Cap, Casinos &amp; Gaming, Small-Cap, Asset Management &amp; Custody Banks, Large-Cap, and Investment Banking &amp; Brokerage, Small-Cap.

U.S. Equities: Still Bullish, With Reservations

Cross-Asset Liquidity Strategist, CrossBorder Capital

Michael J. Howell

Cross-Asset Liquidity Strategist

Implementing Research Using Alt Data & AI

CrossBorder Capital

CrossBorder Capital is a London-based independent investment advisory firm. Founded in 1996, it exploits a gap in the investment arena by focusing on Central bank liquidity. 

It specialises in the monitoring and analysis of global liquidity flows - an important determinant of asset prices, from currencies through to bonds, equities and real estate.

CrossBorder Capital implements its investment strategy and currently manages over US$ 350m.


Cross Asset Strategy

<ul>
<li>China’s PBoC undertakes huge liquidity boost to counteract economic effects of virus scare</li>
<li>Size equivalent to half of entire huge US stimulus from early September, but in one single day</li>
<li>Chinese reserve money now growing at near-30% annualised clip
</li>
<li>This matters since China now represents 28% of Global Liquidity, compared to 6% in year 2000</li>
</ul>


China’s PBoC undertakes huge liquidity boost to counteract economic effects of virus scare
Size equivalent to half of entire huge US stimulus from early September, but in one single day
Chinese reserve money now growing at near-30% annualised clip

This matters since China now represents 28% of Global Liquidity, compared to 6% in year 2000


China Macroeconomics & Academia

Christopher Balding

Macroeconomics

The uniqueness of the current economic environment in China with the coronavirus requires us to readjust all our standard frameworks.  There are so many caveats and potential changes to data, we need to tread carefully about how to interpret the data. What we are seeing is that while the larger manufacturing operations that continue throughout Chinese New Year appear to have large kept production unchanged, they are likely nearing the limit of what can be sustained.  Inventories are building up very rapidly and significantly in excess of what is typical. Given the tied up financial capital and the expectation this will move off into construction projects which seems unlikely over roughly the next month it remains to be seen how Chinese business will manage these increasing dilemmas.

The uniqueness of the current economic environment in China with the coronavirus requires us to readjust all our standard frameworks.  There are so many caveats and potential changes to data, we need to tread carefully about how to interpret the data. What we are seeing is that while the larger manufacturing operations that continue throughout Chinese New Year appear to have large kept production unchanged, they are likely nearing the limit of what can be sustained.  Inventories are building up very rapidly and significantly in excess of what is typical. Given the tied up financial capital and the expectation this will move off into construction projects which seems unlikely over roughly the next month it remains to be seen how Chinese business will manage these increasing dilemmas.

Interpreting January PMI in Light of Coronavirus

All the talk in China recently has focused on the coronavirus and now talk is drifting to its potential impact on the economy.  Economic estimates have started to circulate but we want to be much more cautious primarily because there remains too many unknowns not least of which are about the virus itself.  How should we approach so many unknowns in our economic analysis?

All the talk in China recently has focused on the coronavirus and now talk is drifting to its potential impact on the economy.  Economic estimates have started to circulate but we want to be much more cautious primarily because there remains too many unknowns not least of which are about the virus itself.  How should we approach so many unknowns in our economic analysis?

We track passenger travel by mode of travel to better track what is the state of the Chinese economy.  Despite the widely heralded growth in air and rail travel which account for less than a quarter of total passenger trips, the transportation sector seems to indicate what we think of as a separating economy and speaks to underlying weakness.

We track passenger travel by mode of travel to better track what is the state of the Chinese economy.  Despite the widely heralded growth in air and rail travel which account for less than a quarter of total passenger trips, the transportation sector seems to indicate what we think of as a separating economy and speaks to underlying weakness.

What China Transport Data Tells Us About the State of the Economy

China

The MSCI China Index is a free-float weighted equity index. It was developed with a base value of 100 as of December 31, 1992.

MSCI China Index (MXCN INDEX)

U.S. Equities: Still Bullish, With Reservations

And just like that, the S&P 500, Nasdaq, and the Dow have reclaimed new highs despite ongoing coronavirus concerns, as a buy the dip strategy...

Vermilion Research

China Hits Warp Speed …Risk On Again?

China’s PBoC undertakes huge liquidity boost to counteract economic effects of virus scare Size equivalent to half of entire huge US stimulus from...

Michael J. Howell

Interpreting January PMI in Light of Coronavirus

The uniqueness of the current economic environment in China with the coronavirus requires us to readjust all our standard frameworks. There are so...

Christopher Balding

The Economic Impact of Coronavirus

All the talk in China recently has focused on the coronavirus and now talk is drifting to its potential impact on the economy. Economic estimates...

Christopher Balding

What China Transport Data Tells Us About the State of the Economy

We track passenger travel by mode of travel to better track what is the state of the Chinese economy. Despite the widely heralded growth in air...

Christopher Balding