a/ 11500 -11600 ( +/- levels reached overnight on Dax Futures) are KEY level as 1/ top at the end of 2015 2/ levels
that triggered the up move trough 2017 3/ Up trend since bottom at q1 2016 ….
b/ 13000 will cap up reaction for the moment (up trendline since mid 2016) .
– Trading range 11500 – 13000 : Above 13000 more bullish // Below 11500 : Big Danger if crossed.
UBS most preferred European Utilities are E.on /EDF/ Enel/ Engie / Fortum / Gas Natural.
+ & – to invest in the sector :
+ Sector’s return to positive earnings growth (5-7%) + favorable earnings revision + Earnings visibility.
+ Relative valuation vs others sectors.
+ High Dividends in Low Bond Yields environment.
+ Global Energy transition should be beneficial.
– Politics & new regulations .
– Risk = Long rates evolution .
+ « Defensivity « of sector in streched market environment.
Enel , Engie and E.on are the cheapest based on P/E metric.
Engie on P/BV point of view.
Gas Natural based on Dividend.
10Y Treasuries approaching 2.60% , 10Y JGBs 0.09% highest since July .. markets nervous … Trigger for Stocks correction ???
• Stifel sees a 5% SP500 correction in Q1 for SP500.
• SP500 seen at roughly current levels by EOY = Active investing environment
• Slide 2 for long term forecast !!! (Note that Stifel forecast has been quite correct in the last 6-7 years in this bull market).
• Slides 6 on long rates and SP500.
• US 10 Yields seen at 2.96% eoy
Link to the Stifel Macro & Portfolio Strategy : Stifel 050118
Naspers : Tencent stake worth 160 BLN USD while Naspers market cap on JSE at around 112 BLN USD …
Gap is increasing as Naspers stock price corrected , move mainly due to capital outflows linked to political uncertainties in SA.
All other Naspers stake and businesses are valued « negatively » considering Tencent current price !! … 2 solutions : 1/ Tencent price at some point will collapse.
2/ Gap valuation will close in the future via Naspers stock price adjusting . Anyway , buffer at current price is VERY VERY LARGE .
Stock has corrected 22 % from 4100 to 3200 (top to bottom) – see chart below – : we are at interesting long term entry levels at current price or better at october
trigger levels (see green line on chart) around 3000 ZAR which should act as strong support.
UBS Target price … ZAR 5250 (Today ZAR 3290)
1/ Following commitment of traders report, large speculators have largely cut their long positions from above 200000 contracts to below
100000 which tended to signal in the past 3 years a bottom was in sight . (1st chart)
2/ Gold seasonality (2d chart) : we are exiting a bearish seasonal period for gold ( -2.5% in average between september and december in last 10 years )
and entering into a more positive period (+6.5% in average between end of december into march in last 10 years, and positive 70% of time )
3/ MACD is about to offer a positive break up : See positive outcome of such breakups in Dec16 March17 May17 July17 . Only in the bearish seasonal period
MACD positive signals did not turned positive but rather neutral .(3rd chart)
Source : Barchart.com
Source : Stockcharts .com
Source : Stockcharts .com