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

Support levels have meant little more than talking points as indexes are slicing through them like butter. The truth remains that no one knows how low we will go, and the trend is still down for global equities. At the same time, every week where the MSCI ACWI loses ~10%, it gets that much closer to finding a bottom. In this report we provide updates on several indicators we are watching as to clues of a bottom.  We also highlight actionable themes within Staples, Health Care, Technology. We continue to recommend areas with defensive and/or growth characteristics.

Support levels have meant little more than talking points as indexes are slicing through them like butter. The truth remains that no one knows how low we will go, and the trend is still down for global equities. At the same time, every week where the MSCI ACWI loses ~10%, it gets that much closer to finding a bottom. In this report we provide updates on several indicators we are watching as to clues of a bottom.  We also highlight actionable themes within Staples, Health Care, Technology. We continue to recommend areas with defensive and/or growth characteristics.

Dollar Surge Further Aggravates Equity Markets

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>QE5 is here (we just had QE4), QE6 is coming and probably others. Cutting interest rates is a bad move which could even destroy short-term liquidity</li>
<li>
US Fed balance sheet is set to test US$6 trillion under the latest QE5</li>
<li>Next round of coronavirus crisis will strain US$ forex swap and funding markets as supply-chain payments fall and lead to QE6</li>
<li>We expect near-term firm US dollar, and later much stronger gold price and steeper yield curves. Pattern of crisis has similarities with 9/11, which had economic effects lasting over 4 months. The coronavirus crisis may be shorter, but it will be both more extensive and more severe.</li>
</ul>


QE5 is here (we just had QE4), QE6 is coming and probably others. Cutting interest rates is a bad move which could even destroy short-term liquidity

US Fed balance sheet is set to test US$6 trillion under the latest QE5
Next round of coronavirus crisis will strain US$ forex swap and funding markets as supply-chain payments fall and lead to QE6
We expect near-term firm US dollar, and later much stronger gold price and steeper yield curves. Pattern of crisis has similarities with 9/11, which had economic effects lasting over 4 months. The coronavirus crisis may be shorter, but it will be both more extensive and more severe.


Why The Latest Liquidity Crisis Means QE5 & QE6

Mark Artherton, CFA

Inteqres

Thematic (Sector/Industry)

Europe is officially in crisis.  Borders are closed, shops are empty and lockdowns are growing.  Fear driven by social media and the press is clearly in charge and policymakers appear to be behind the curve.   We take a look at the data, policy responses, and market reaction.
There is a growing risk of a U shaped recession and an outside risk of depression caused by fear and a social media led overreaction function.  Policymakers and corporate management have some terrible choices to make, as the remedy currently at play in Europe and the US may actually end up being worse than the disease.
Whilst certain countries in Asia have capped the virus, we do not see Asia escaping the global economic consequences of possible errors in the west.
We believe that Italy is the most important country in the world for investors at the moment and it is here that we see a ray of light at the end of the tunnel - we hope it isn't just a train coming the other way.

Europe is officially in crisis.  Borders are closed, shops are empty and lockdowns are growing.  Fear driven by social media and the press is clearly in charge and policymakers appear to be behind the curve.   We take a look at the data, policy responses, and market reaction.
There is a growing risk of a U shaped recession and an outside risk of depression caused by fear and a social media led overreaction function.  Policymakers and corporate management have some terrible choices to make, as the remedy currently at play in Europe and the US may actually end up being worse than the disease.
Whilst certain countries in Asia have capped the virus, we do not see Asia escaping the global economic consequences of possible errors in the west.
We believe that Italy is the most important country in the world for investors at the moment and it is here that we see a ray of light at the end of the tunnel - we hope it isn't just a train coming the other way.

Coronavirus - An Unexpected Positive Ray Of Light From The Epicentre - Inteqres

<ul>
<li>This is a liquidity crisis, where fungibility disappears and Central Banks simply have to act</li>
<li>Expect QE5 (we just had QE4), QE6 and others. US Fed balance sheet set to break US$5 trillion. Cutting interest rates is a bad move which could even destroy short-term liquidity</li>
<li>Next round of coronavirus crisis will strain US$ fx swap and funding markets as supply-chain payments fall</li>
<li>Expect near-term firm US dollar, and later much stronger gold price and steeper yield curves</li>
</ul>


This is a liquidity crisis, where fungibility disappears and Central Banks simply have to act
Expect QE5 (we just had QE4), QE6 and others. US Fed balance sheet set to break US$5 trillion. Cutting interest rates is a bad move which could even destroy short-term liquidity
Next round of coronavirus crisis will strain US$ fx swap and funding markets as supply-chain payments fall
Expect near-term firm US dollar, and later much stronger gold price and steeper yield curves


<ul>
<li>This market panic could further squeeze Global Liquidity
</li>
<li>Large debt overhang means US$50 trillion needs to be re-financed each year</li>
<li>
Debt/ GDP is 310%, but more worrying Global Liquidity is lagging rising debt</li>
<li>Problem is not interest rates, but capacity of capital, i.e. balance sheet size</li>
<li>Policy makers need to use fiscal policy to boost the economy; monetary policy for financial stability, and leave China to look after the World inflation rate!</li>
</ul>


This market panic could further squeeze Global Liquidity

Large debt overhang means US$50 trillion needs to be re-financed each year

Debt/ GDP is 310%, but more worrying Global Liquidity is lagging rising debt
Problem is not interest rates, but capacity of capital, i.e. balance sheet size
Policy makers need to use fiscal policy to boost the economy; monetary policy for financial stability, and leave China to look after the World inflation rate!


United States

The MSCI World Index is a free-float weighted equity index. It was developed with a base value of 100 as of December 31, 1969. MXWO includes developed world markets, and does not include emerging markets. MXWD includes both emerging and developed markets.

MSCI World Index (MXWO INDEX)

Dollar Surge Further Aggravates Equity Markets

Support levels have meant little more than talking points as indexes are slicing through them like butter. The truth remains that no one knows how...

Vermilion Research

Why The Latest Liquidity Crisis Means QE5 & QE6

QE5 is here (we just had QE4), QE6 is coming and probably others. Cutting interest rates is a bad move which could even destroy short-term...

Michael J. Howell

Coronavirus - An Unexpected Positive Ray Of Light From The Epicentre - Inteqres

Europe is officially in crisis. Borders are closed, shops are empty and lockdowns are growing. Fear driven by social media and the press is...

Mark Artherton, CFA

GFC2? Liquidity Crisis

This is a liquidity crisis, where fungibility disappears and Central Banks simply have to act Expect QE5 (we just had QE4), QE6 and others. US Fed...

Michael J. Howell

The Debt Virus Is The Real Threat

This market panic could further squeeze Global Liquidity Large debt overhang means US$50 trillion needs to be re-financed each year Debt/ GDP is...

Michael J. Howell