(Makor) Tech View Euro Stoxx 50 Index (3,496 last) - sell rallies to 3,560-

Summary

 

·         The Index bounced nicely yesterday and is expected to continue its bounce this morning at least in the early hours of trading

·         The 3,347-80 support area is important as it combines the recent cycle low from June and the 200 day moving average. While above it a minimum attempt to fill the gap is likely

·         A bounce towards the 55dma at 3,593 and the towards the declining channel resistance at 3,620 would provide a good selling opportunity

 

Strategy: Sell 1 unit at 3,560, add 1 more unit at 3,600, target a move to 3,312 with a stop on a daily close above 3,652 (orders GTC)

 

 

Daily chart

 

 

(Barcap) Investor Intel. : Hedge fund unwind

Macro/CTA funds had their largest drawdown on Monday since August 2007 as risk assets collapsed and the euro rallied. With markets in flux after the Greece-induced shock, our composite equity positioning measure is at the highest level since early
December 2014. On the other hand, bond positioning is a bit cleaner. Exposure to euro area equities is still underweight, helping to support the rally today on Greek headlines. However, trust has been eroded and the July 5 referendum is likely to proceed. Although recent developments may favor a ‘yes’ vote and could lead to a relief rally in global equities, the potential for ongoing political uncertainty in Greece combined with extended positioning could see a more moderate move than some are expecting. A “no” vote could lead to a large selloff (see Deadline missed, referendum on for a discussion of the key issues). Extended equity positioning is an overhang near term, but fundamentals and fund flows are the key to sustained performance; both should be supportive of equities in Q3 (see Good time to buy cyclically sensitive assets).

Equity fund positioning in aggregate is now 1.1std above average. When composite beta was at least 1.0 stdev above average, global equities declined 2% over the next month on average

(GS) Research note this Morning - have a look

--> All Notes attached
* GS - Asia : 2H strategies: stay selective in a moderate return regime
* GS - China: Brokers & Asset Managers - Prefer large brokers like GFS (CL-Buy); cut target prices; upgrade CMS to Neutral
* GS - Europe Construction - Growing markets, growing share; initiate on TPK and WOS as Buy
* GS - Europe Transportation - Global industrial data weak, Europe better ─ What the global transport markets say

>>> Europe Brokers Research Note today - see attached.


- BofA-ML : Flow Show : Buy Signal on Equities
- BARACAP : EUROPEAN MEDIA : Swimming Upstream
- BARCAP : European Telco Services : FX Factor
- Exane : European Distillers, RCO, RI, DGE
- DB : Europpean integrated Oil RDB Upgraded from Hold To Buy, PT adj on GALP, REP, STL

(BofA-ML) The Flow Show : Rate shocks & buy signals

Looming “buy signal” for global stocks: no equity capitulation in flow data but BofAML Global Breadth Rule says equities oversold (net 69% of markets in MSCI ACWI trading below 200 & 50dma; holdouts Japan, India, Taiwan, France…another 2-3% downside triggers contrarian “buy” signal (threshold = net 88%); contrarian bullish for risk assets Q3; last Breadth Rule “buy” signal was Jan 6th


>>> Asset Class Flows
- Equities: $0.4bn outflows (all via ETF’s) 
- Bonds: chunky $6.1bn outflows (largest 4-week outflows since Jul’13) 
- Precious Metals: flat

>>> Equity Flows
Japan: $0.6bn inflows (inflows in 18 out of past 19 weeks) 
Europe: $1.7bn inflows (7 straight weeks) 
US: $5.9bn outflows (2 straight weeks) 
EM: $4.4bn inflows (2 straight weeks)

>>> Fixed Income Flows
- 10 straight weeks of outflows ($2.3bn) from govt bond funds (longest outflow streak since Mar’09) 
- 6 straight weeks of outflows from EM debt funds ($0.2bn) 
- 4 straight weeks of outflows from HY bond funds ($2.9bn) 
- IG bond funds eke out $0.3bn inflows after 2 weeks of redemptions 
- Modest $0.5bn outflows from municipal bond funds (conspicuously muted outflows given Puerto Rico’s likely debt restructuring/moratorium)

>>> Europe : Brokers Upgrades & Downgrades - 2nd of July 2015

>>> Up
*AFRICA OIL CORP RAISED TO OUTPERFORM AT BMO CAPITAL MARKETS
*ASTRAZENECA RAISED TO BUY VS HOLD AT BERENBERG
*AXEL SPRINGER RAISED TO BUY AT HSBC
*GREAT PORTLAND ESTATES RAISED TO BUY VS NEUTRAL AT GOLDMAN
*K+S RAISED TO HOLD VS SELL AT BERENBERG
*MUNICH RE RAISED TO HOLD VS SELL AT BANKHAUS LAMPE
*OCI RAISED TO OVERWEIGHT VS NEUTRAL AT JPMORGAN
*OPHIR ENERGY RAISED TO BUY VS NEUTRAL AT UBS

>>> Down
*ASHMORE CUT TO HOLD VS ADD AT NUMIS
*ASML CUT TO SELL VS HOLD AT LIBERUM
*BOUYGUES CUT TO UNDERPERFORM AT RBC CAPITAL
*BROOKS MACDONALD CUT TO HOLD VS BUY AT NUMIS
*CASINO CUT TO SELL VS NEUTRAL AT UBS
*JUPITER CUT TO ADD VS BUY AT NUMIS
*POLAR CAPITAL CUT TO REDUCE VS HOLD AT NUMIS
*SHAFTESBURY CUT TO NEUTRAL VS BUY AT GOLDMAN

>>> PT Change


>>> Initiation
*CAPITAL STAGE RATED NEW BUY AT BANKHAUS LAMPE, PT EU8.40
*JIMMY CHOO RATED NEW OVERWEIGHT AT BARCLAYS, PT 208P
*PERNOD RICARD RATED NEW BUY AT MIRABAUD, PT EU135
*PETROCELTIC RATED NEW SECTOR PERFORM AT RBC CAPITAL
*REMY COINTREAU RATED NEW NEUTRAL AT MIRABAUD, PT EU68.30
*TRAVIS PERKINS RATED NEW BUY AT GOLDMAN
*WOLSELEY RATED NEW BUY AT GOLDMAN

>>> Call
>> Stock
*DAETWYLER ADDED TO BAADER-HELVEA TOP PICK LIST; STAYS BUY
* Assa Abloy, Babcock Added to Credit Suisse Europe Top Picks


>>> Research Report Attached
- BARACAP : EUROPEAN MEDIA : Swimming Upstream
- BARCAP : European Telco Services : FX Factor

>>>> What to look at today - 2nd of July 2015

Dow+0.79% S&P+0.70% Nasdaq+0.53% Russell+0.21 VIX 16.11
US MArket Closed higher. US is all about Greece...Equities surged out of the gate amid reports from Europe indicating Greece is now ready to accept all conditions in order to secure a bailout. GErman reiterated that talks will not resume until after Sunday's referendum, adding that "a compromise at any price" is not worthwhile. Similarly, Eurogroup Chief Jeroen Dijsselbloem said he does not see the need for a resumption of talks ahead of Sunday's referendum. Greek Prime Minister Alexis Tsipras reiterated his call for a ‘no' vote during Sunday's referendum. Nine sectors were able to end the day with gains while energy (-1.3%) struggled. WTI crude settled lower by 4.2% at $56.94/bbl, Near Iranian settlement put more pressure on Oil. Airlines were not boost by oil price trading down, Sector traded down after the Department of Justice confirmed a probe into potential collusion in the industry. Volume were ahead of average @ 840mil shares...US After Hours PRGS +6.6%, FC -0.3%, FDO -0.2% following earnings/guidance...XOOM +21.3% to be acquire by payapl @$25/sh{NSN NQTVTCMEQTXC<Go>}...Asian indices are trading mixed ahead of a key US non-farm payrolls report following Wednesday's 6-month high in ADP jobs earlier, along with marginal improvement in US ISM manufacturing. Shanghai Composite was once again the notable decliner, falling as much as 3% before a rebound and down again. Chinese press reported Shanghai Exchange could allow real estate to be used as collateral in margin call. Another local press report suggested China govt could announce new fiscal stabilizing measures based on economic conditions. In Japan, BOJ Q2 Tankan survey for CPI saw expectations for 1-year remaining at 1.4%, 3-year was lowered to 1.5% from 1.6% and 5-year unchanged at 1.6%. Note that these forecasts are still well below the 2% target anticipated to be achieved by H1 of 2016... IMF's Lagarde said she was hopeful the voting will bring more clarity, and it is increasingly evident that creditors are clamoring for referedum to weaken Syriza with the likely YES vote and potentially bring about a change in govt toward a more pro-austerity one. Greek press polls saw expectations for the YES vote at 47.1% vs 43.2% for a NO vote. Moody's also cut Greek sovereign by one notch to CAA3 and placed it on review for a further downgrade.

Nikkei +1.12% Hang Seng +0.53% Shanghai -2.15%

Eur$ 1.1070 JPY 123.38 GBP 1.5609 CHFEUR 0.9555 RUB $55.8367 WTI $57.09 (+0.21%) GOLDS 1,167.72 (not Far from lows)

S&P -0.08% EuroStoxx +0.08% DAx+0.12% SMI+0.02%

Macro :
- Dijsselbloem Says No Grounds for More Talks Ahead of Greek Vote
- Dijsselbloem Reminds Tsipras of Greek Pledge to Honor Debts
- Iceland Raises Aviation Alert Level Citing Seismic Activity
- Greek ‘Yes’ Has 47.1% Support, ‘No’ 43.2%: GPO Poll in Euro2day
- EU, Greece Were EU60m Apart, Juncker Tells Allies: Politico
- Greece Cut to Caa3 From Caa2 by Moody’s, May Be Cut Further

Keep an eye on :
- A2A IM : A2A to Appeal Arbitration Ruling Requiring EU37.9m Payment
- AC FP : Added to top Underperforme at CS
- AIR FP : Airbus Considers Manufacturing Airplane Parts in Vietnam: Govt
- ALO FP : Alstom Wins EU170M Rhone-Alpes Train Contract, Echos Says
- AMS SM : Amadeus to Buy Accenture’s Navitaire for $830m
- ASSAB SS : Assa Abloy, Babcock Added to Credit Suisse Europe Top Picks
- BAB LN : Assa Abloy, Babcock Added to Credit Suisse Europe Top Picks
- BRBY LN : Added to top Underperforme at CS
- DTE GY : Dish Waiting for DTV/T Approval Before Pursuing TMUS: Gasparino
- ELUXB SS : GE Unit Sale to Electrolux Said to Be Opposed by Antitrust Staff
- ELUXB SS : Electrolux Contests U.S. Effort to Block Purchase of GE Unit
- EOAN GY : Eon Says Uniper Won’t Be German Energy Industry’s Bad Bank: HB
- FNC IM : Finmeccanica, Fincantieri Gets EU1.1b Italian Navy Contract
- GLJ GY : Grenkeleasing 1H Leasing’s New Business Rises 15%
- IBE SM : Iberdrola, UIL Ask Connecticut to Extend Merger Review
- IHG LN : InterContinental Hotels Group shares gain on bid hopes
- ISP IM : Intesa Sanpaolo Said to Get Interest in A4 Holding Stake:Reuters
- LONN VX : Lonza Reports Added Long-Term Product Supply Pact With Alexion
- MS IM : Sky Offered EU1.1b for Mediaset Premium Pay-TV Unit: Radiocor
- MYRN SW : Gotham City Discussed Myriad Group as Short Idea at FT Conf
- NUM FP : Numericable in Dispute With City of Paris, Les Echos Says --> See Le Monde Artcile sent Yest. night
- EGL PL : Mota-Engil to Announce New Building Projects Soon, CEO Says
- PC IM : Pirelli bidder ChemChina seeks to convince hedge funds it will not boost public offer - Il Sole 24 Ore
- GLE FP : SocGen CEO Oudea Says Euro Region Can Handle Any Greece Scenario