18
Equity Indices Value
North America
Dow Jones 27'138 18.5% 18.5% 23.3%
S&P 500 2'997 21.3% 21.3% 26.3%
Nasdaq 100 7'863 25.2% 25.2% 30.3%
Europe
EuroStoxx 50 3'526 21.3% 16.5% 21.3%
Stoxx 600 390 19.3% 14.6% 19.3%
FTSE 7'345 13.2% 10.5% 14.9%
SMI 9'979 22.2% 20.8% 25.9%
DAX 12'401 17.4% 12.8% 17.4%
CAC 5'616 22.2% 17.4% 22.2%
MIB 22'026 24.7% 19.8% 24.7%
IBEX 9'069 9.3% 5.0% 9.3%
Asia & Emergings
Nikkei 21'988 11.2% 13.0% 17.7%
HSCEI 10'628 8.9% 9.1% 13.6%
S&P China 549 13.3% 13.3% 8.8%
Kospi 272 4.4% -1.9% 2.1%
TAIEX 10'898 16.6% 15.3% 20.1%
IBOV 102'885 17.1% 10.9% 15.3%
Nifty 11'004 2.4% -0.5% 3.6%
Russian RTS 1'387 37.0% 37.0% 31.6%
MSCI EM ($) 41.86 8.0% 8.0% 12.4%
MSCI World ($) 2'206 19.4% 19.4% 24.3%
% Total Return USD % TR EUR % TR
Chart of the Week – Crude Oil
Every asset class remains in the black in 2019 despite
the recent correction;
Remain prudent as the global economic environment is
deteriorating.
Crude Oil rebounded sharply yesterday after a drone strike
on a key Saudi Aramco facility halved the kingdom’s
production.
This represents the largest supply disruption on record.
Aramco said it will face weeks or months before restoring
their giant Abaqaiq plant and believes less than half of
supply can be restored quickly.
The US blamed Iran for the attack and rising geopolitical
risk will put even more pressure on oil prices.
-> Tactically buy WTI Crude Oil
September 17, 2019 2
2019 Total Return Performances
WTI Crude Oil – Generic – Daily
Commodities
WTI Crude Oil broke out of its short term resistance and
should soon test the high end of its monthly range with a
$76 target in case of a breakout (see weekly graph).
-> Go long with stops at $57 (previous resistance).
The US Energy sector is breaking out as well. Stay long
with a focus on large integrated oil producers with a
diversified business model and high dividends.
September 17, 2019 3
US Energy Sector – Daily
WTI Crude Oil – Generic – Weekly
WTI Crude Oil – Generic – Monthly
Asset Classes – Performance per Year
September 17, 2019 4
2018 -2019 2019 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007
US Equities S&P 500 16.0% 21.3% -4.4% 21.8% 12.0% 1.4% 13.7% 32.4% 16.0% 2.1% 15.1% 26.4% -37.0% 5.6%
Russell 2000 5.0% 18.0% -11.0% 14.6% 21.3% -4.4% 4.9% 38.8% 16.4% -4.2% 26.8% 27.1% -33.8% -1.6%
NASDAQ 100 25.3% 25.2% 0.0% 33.0% 7.3% 9.8% 19.4% 36.9% 18.3% 3.6% 20.1% 54.6% -41.6% 19.2%
Global Equities MSCI World 9.6% 19.4% -8.2% 23.1% 8.2% -0.3% 5.6% 27.4% 16.6% -5.0% 12.4% 30.9% -40.3% 9.7%
MSCI ACWI 7.6% 18.1% -8.9% 24.7% 8.5% -1.8% 4.8% 23.5% 16.8% -6.8% 13.3% 35.5% -41.8% 12.3%
EuroStoxx 50 7.6% 21.3% -11.3% 9.9% 4.8% 7.3% 4.9% 22.7% 19.6% -13.1% -1.8% 27.0% -41.8% 10.4%
Stoxx 600 7.0% 19.3% -10.3% 11.2% 2.4% 10.1% 7.8% 21.4% 18.9% -8.0% 12.3% 33.4% -43.4% 2.9%
FTSE 100 3.2% 13.2% -8.8% 12.0% 19.2% -1.3% 0.7% 18.7% 10.0% -2.1% 12.7% 27.4% -28.3% 7.4%
Topix -8.2% 9.2% -16.0% 22.2% 0.3% 12.1% 10.3% 54.4% 20.9% -17.0% 1.0% 7.6% -40.6% -11.0%
Emergings HSCEI -2.0% 8.9% -10.0% 29.6% 1.4% -16.9% 15.5% -1.4% 19.7% -19.6% 1.7% 66.0% -49.9% 58.8%
Bovespa 34.7% 17.1% 15.0% 26.9% 38.9% -13.3% -2.9% -15.5% 7.4% -18.1% 1.0% 82.7% -41.2% 43.6%
MSCI Emerging Markets -6.8% 8.7% -14.3% 37.8% 11.7% -14.6% -2.0% -2.3% 18.6% -18.2% 19.2% 78.9% -53.2% 39.7%
Bonds Euro Aggregate Bond Index 7.9% 7.4% 0.4% 0.7% 3.3% 1.0% 11.1% 2.2% 11.2% 3.2% 2.2% 6.9% 6.2% 1.4%
Euro 1-3Y Bond Index 0.5% 0.7% -0.2% -0.1% 0.6% 0.6% 1.8% 2.0% 5.0% 2.3% 1.7% 5.8% 5.8% 3.6%
US Aggregate Bond Index 7.1% 7.1% 0.0% 3.5% 2.6% 0.5% 6.0% -2.0% 4.2% 7.8% 6.5% 5.9% 5.2% 7.0%
US 1-3Y Bond Index 4.7% 3.0% 1.6% 0.9% 1.3% 0.7% 0.8% 0.6% 1.3% 1.7% 2.6% 5.0% 4.6% 6.7%
US High Yield 9.2% 11.5% -2.1% 7.5% 17.1% -4.5% 2.5% 7.4% 15.8% 5.0% 15.1% 58.2% -26.2% 1.9%
Commodities CRB Index -6.9% 6.3% -12.4% 0.7% 9.3% -23.4% -17.9% -5.0% -3.4% -8.3% 17.4% 23.5% -36.0% 16.7%
Gold 5.1% 26.8% -17.1% 8.1% 74.1% -34.1% -18.3% -49.2% -8.3% -20.3% 34.7% 35.8% -28.5% 21.8%
WTI Crude Oil -0.5% 32.4% -24.8% 12.5% 45.0% -30.5% -45.9% 7.2% -7.1% 8.2% 15.1% 77.9% -53.5% 57.2%
Dollar Index 6.9% 2.4% 4.4% -9.9% 3.6% 9.3% 12.8% 0.3% -0.5% 1.5% 1.5% -4.2% 6.0% -8.3%
Hedge Funds HFRX Hedge Fund Index -1.5% 5.6% -6.7% 6.0% 2.5% -3.6% -0.6% 6.7% 3.5% -8.9% 5.2% 13.4% -23.3% 4.2%
Equity Markets
September 17, 2019 5
US Equities
The S&P is losing momentum and upside is limited.
From a broader standpoint, the S&P should remain in
the 2’400-3’050 range for some time.
The Russell 2’000 rebounded to 1’600 as expected but
should remain in its trading range as well.
It finally rebounded compared to the S&P 500. Stay long
small caps vs large caps as the ratio trades at a
historically low level.
September 17, 2019 6
S&P – Daily
Russell- Daily Russell vs S&P
US Equities
The Nasdaq remains a bit weaker amid some heavy
sector rotation. Short term support is 7’750 but a break
of this level could send the index lower to 7’250 (200D
MA).
The monthly picture on the Nasdaq shows the index has
a wide trading range width and could correct without
breaking the long term uptrend.
US Banks are recovering further amid easier regulatory
environment hopes and falling bond yields.
September 17, 2019 7
Nasdaq - Daily
S&P Banks - DailyNasdaq– Monthly
European Equities
The EuroStoxx is losing momentum and should return in
the 3’420-3’550 range. →Reduce exposure
Monthly chart for the EuroStoxx 50 shows that the index
remains in a long term pennant and closed the month in
the high end of its trading range.
Eurozone Banks have rebounded strongly amid falling
bond yields, ECB support and lower political risk in Italy
but are reaching an overbought level at the 200D MA
resistance.
September 17, 2019 8
EuroStoxx – Daily
EuroStoxx – Monthly EuroStoxx Banks - Daily
European Equities
A number of European indices are already reaching
there resistance level and failed to break out with a high
probability of returning in the recent trading range.
Resistance level :
CAC 40: 5’650
SMI: 10’000
DAX: 12’500
Stoxx ex Fin: 211
September 17, 2019 9
CAC – Daily Stoxx ex Financials - Daily
SMI – Daily
Emergings
The MSCI Emerging and Chinese Shares continue to
recover on trade deal hopes.
The HSCEI trading range is now 10’000-11’000 but
needs further catalyst for a breakout.
The S&P China is reaching some crucial resistance level
as well.
Chinese Equities now need some progress of US-China
trade talk to warrant a break out.
September 17, 2019 10
MSCI Emerging - Daily
HSCEI -
DailyS&P China - Daily
Global Markets
September 17, 2019 11
Interest Rates
Global bonds are in a technical correction as the ECB
QE program has failed to impress and indicators show
some resilience of the US economy.
German Bund Yields have room to “normalize” and
return to -0.20%, -0.30%, especially if Germany
launches a fiscal stimulus package.
Technically, the T-Note is breaking down and should
soon reach our 126-125 target (2.30% equivalent Yield).
September 17, 2019 12
Bund (active contract) – Daily
T-Note – DailyGerman 10Y Rates –
Daily
Credit
Credit Spreads are close to historical lows as risk
aversion remains low.
The US High Yield Market is overbought -> Hedge
positions.
Given the current lack of yield and visibility in credit
markets, we highly recommend switching exposure to
low-volatility, liquid alternatives.
September 17, 2019 13
Europe ITraxx Main - Daily Europe Crossover - Daily
IBOX US High Yield - Daily
US Dollar
As expected the Dollar Index fell back in its multi-month
trading range.
Continue to play the range with a long Dollar bias.
Tactically sell Euro/Dollar at 1.1150 and reduce at
1.0960-1.0900
Longer term, the Dollar should break out and the Euro
could ultimately slide to 1.06-1.04 if the trend line
support breaks.
September 17, 2019 14
Dollar Index – Daily
Euro/Dollar – WeeklyEuro/Dollar - Daily
Currencies
The Dollar/Yen is nearing a resistance level. Secure
some profit on long positions.
The Euro / Swiss Franc bottomed out but remains weak
amid some economic and leadership weaknesses in the
Eurozone.
The Pound remains volatile amid Brexit uncertainties.
Do not chase a rebound as the situation remains highly
complicated. Tactically add back shorts around current
levels.
September 17, 2019 15
Pound - DailyEuro/Swiss Franc - Daily
Dollar/Yen - Daily
Commodities
As expected, Gold dropped from its overbought level. We
recommend to rebuild positions on a pullback from
1’445/50 to 1’390;
Longer term, Gold chart shows a significant breakout.
Silver entered a short term correction as well, rebuilt
positions on a pullback at 17.10 & 16.05.
September 17, 2019 16
Gold – Weekly
Silver - DailyGold - Monthly
Contacts
Union Securities Switzerland Research
Tel: +41 22 59 18 64
Union Securities Switzerland SA is a FINMA-registered Securities Dealer.
Union Securities Switzerland SA
11 Cours de Rive
1204 Geneva Switzerland
www.unionsecurities.ch
September 17, 2019 17
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September 17, 2019 18
