Stoxx600 (SXXR) : New highs

Lyxor stoxx 600 Net Return (SXXR) - 08/07/19

Short Term trend: Positive (100/100)
Long Term trend: Positive (100/100)

scores computed by our proprietary algorithms - cf methodology

Index profile

The Stoxx600 enjoys a very important depth with 600 holdings ​​and a great diversity by its exposure to the main sectors and countries of the European Union, including outside of the eurozone.

This index is a benchmark for the European markets, and we analyze its stock market behavior with great attention because the evolution of this index partly conditions our sectoral and geographic strategy.

The index is fairly balanced in its weighting with 4 major sectors that represent two thirds of the capitalization. In the first position is the cyclical and sustainable consumer goods sector (23%), which includes food giants such as Nestlé or AB-Inbev, as well as luxury, cosmetics and ready-to-wear brands like LVMH or Inditex as well as the automotive sector; financial (19%) industry (14%) and health (13%). In this index, energy-related values ​​represent only 7% and raw materials 9%.

In addition, it should be noted that there is a certain level of currency risk in this index consisting of 24% of British securities and 14% of Swiss securities, even if the securities concerned are international and fairly exposed to the dollar.

The STOXX600 is very representative of the European economy because of its sector weighting, which is less favorable to oil than in some national indices (like the CAC40), while the financial sector (banks + insurance) remains a key compartment with 10% of the weighting but without reaching the weight of the Italian or Spanish indices (c.30%).

This balanced weighting allows MEUD to have lower volatility than the national indices, as this index is much more diversified and without sector bias. The ETF MEUD has the advantage of replicating a broader index than the Eurostoxx50 and which also incorporates smaller capitalizations, but with a more dynamic path. The European economic cycle is currently weakening, which is validated both by the PMIs datas and also the market consensus for corporates which is adjusting lower at quick pace for 2019 results expectations.

The ECB remains a factor of stabilization and the monetary normalization should be very progressive in the absence of inflation.


Instruments: MEUD (Lyxor in Euro),C6E (Amundi in Euro), ETZ (BNP Theam in Euro), EXSA (iShares in Euro)

Technical analysis

Monthly data analysis

The monthly chart shows that the end of 2018 corrective phase has boosted the index, which is now exceeding its historical highs. This overtaking if it is confirmed could also put an end to the long congestion phase that has been raging since 2016. The MACD has crossed upwards, which is another positive signal, which calls for the continuation of the uptrend. The question now is whether there will be an acceleration of the momentum corresponding to the breaking of the resistance.

Weekly data analysis

On the weekly chart we see the positive reaction of the index from the EMA200 confirmed with the recovery above the EMAs12 and 26 allowing a bullish reversal of the MACD. After a new test of the EMA26 in May, the index has begun a new wave of growth in June, which now seems to accelerate after crossing the great resistance of 830 pts. For this crossing to be validated, prices should reach 850 pts and remain there for some time

Country breakdown

United Kingdom 25%
France 18%
Switzerland 14%
Germany 13%
Netherlands 5%
Spain 5%
Sweden 4%
Others 16%

Sector breakdown

Financials 18%
Industrials 14%
Consumer staples 14%
Health Care 13%
Consumer discretionary 9%
Materials 8%
Energy 6%
Others 17%

Top ten holdings

Nestlé 3%
Novartis 2%
Roche Holding 2%
SAP 2%
Total 2%
Royal Dutch Shell 1%
Linde 1%