Big Picture

Our overall Primary Trend Indicator remains Neutral.  We have a bias to the upside but our caution is peaked as stock markets are climbing an increasing wall of worry.   Trade tensions, war games in the Middle East and concerns over corporate profit growth have investors on edge ready to move to the sidelines.  Technically, the market is moving upward on money flow with interest rates at record lows across the globe.  Cyclical sectors such as resources, gold, oil are showing the most strength in price action and earnings growth potential.   

Changing Fundamentals

$Australia manufacturing PMI for June at 51.7 vs prior 51.1, services PMI rises to 53.3

$Japan June manufacturing PMI at 49.5 vs prior 49.8, new orders decline most in three years

$Eurozone June preliminary Manufacturing PMI 47.8 vs consensus 48.0

$Germany June preliminary manufacturing PMI 45.4 vs consensus 44.6 

$France June preliminary manufacturing PMI 52.0 vs consensus 50.8

Focus List

 

$Global Stock Markets are showing mixed direction after two strong up days.   Japans’ $Nikkei index is down 1% while China shares are up 0.20%.  Interesting to note that China stocks are showing technical strength and a turn higher after basing the past month.   We will highlight a few China stocks that may outperform in the coming days/weeks.    European indexes are all virtually unchanged.   $GOLD Prices continue to rocket higher, up another $20 to $1410 per ounce – the biggest weekly gain in over 5 years.   $WTI oil prices are up 50 cents to $57.50 per barrel, a strong week for global oil prices on the back of increasing tensions in the Middle East.   $COPPER prices rebounded on a lower $USD, up 4 cents to $2.72 per pound.   Today is also an important day for Options contracts – Triple Witching Day – it is the simultaneous expiration (or rollover) of various futures and options contracts.  Volatility and trading volumes today will be above average.

 

Autodesk Inc. $ADSK – an American multinational software corporation that makes software services for the architecture, engineering, construction, manufacturing, media, education, and entertainment industries.  The stock is showing signs of a turn around and this weeks performance completely retraces the last 2 weeks.   A break above $174 would take the stock towards new all time highs above $180.  Positive Relative Strength and Momentum are supporting this move.   Fundamentals are also positive, as the company continues to grow marketshare, win contracts and increased billings and backlog.   See Chart Below

 

Notables:

Superior Plus Group $SPB.to –  The specialty chemicals stock continues to move higher towards putting in a new 52 week high above $14.  Chemical stocks are up on news of tight global stockpiles, and refinery outages.   The stock also pays a 5% annual dividend.

IamGold Corp. $IAG/IMG.to – The stock is “in play” as takeover rumours heat up at the same time $GOLD prices rocket through the $1400 an ounce area.  Look for continued upside in this name towards $4 in the US and $4.50 in Canada

Canopy Growth Corp. $CGC/WEED.to – Reported results overnight which underwhelmed investors expectations, as expenses ballooned 350% year-over-year while revenues grew 312%.  Top-Like EPS came in 66 cents below expectations.   The stock is lower by 7% in premarket trade.