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Finance Report & Market Outlook | International Stock Market Review

Every week we round up what has happened in world economies across the globe. Looking at indicies, equity markets, and forex. We also preview five companies that may affect the stock price of International Large Caps.

in association withInternaxx logo




Market Outlook December 6th - December 10th PDF Print E-mail

Market Outlook

- WALL STREET:
US indices ended the week higher with the Nasdaq Composite reaching its highest level since December 2007. On the economic data front, nonfarm payrolls rose by 39k in November (150K expected) from an upwardly revised 172K increase in October but unemployment rate rose to 9.8% in November (9.6% expected) from 9.6%. However, October pending home resales surged 10.4% MoM (-1.0% expected) after dropping 1.8% in September. Regarding sectors, banks and diversified financials pared their previous week losses after adding respectively 7.7% and 5.27%. Material also added more than 5% during the week. On the opposite, households & personal products and food & beverage rose appx 0.5%. Technically, a flat consolidation remains expected on the S&P 500.

- EUROPE:
The FTSE100 was the second best index performer in Europe, last week, just after the Euro Stoxx 50. The Office for Budget Responsibility raised its 2010 UK GDP growth forecast to 1.8% from 1.2% but reduced it for 2011 to 2.1% from 2.3% and to 2.6% from 2.8% for 2012. November PMI construction rose to 51.8 (51.3 expected) from 51.6 however November consumer confidence unexpectedly fell to -21 (-19 expected) from -19. Technically, on the FTSE 100, as long as the former highs reached in early November are not surpassed, the risk will remain on the downside. Expect a further correction move towards the support base around 5440 and 5330. In the rest of Europe, S&P Ratings Services placed Portugal and Greece on "Creditwatch" with a negative outlook. Jean-Claude Trichet said: "Uncertainty is elevated" and "We have tensions and we have to take them into account" thus, ECB announced it will delay the withdrawal of emergency liquidity while 3Q Euro-zone GDP rose 1.9%, in line with expectations. Regarding sectors, automobile and basic resources rose around 5% whereas, utilities and health care declined approx 1%. Technically, the Stoxx 600 bounced off its rising trend line in place since Mays bottom and is expected to rise towards 280.

  December 6th - December 10th

border=0 Market Round up

 

Weekly chg (%)

Last

Dow Jones

2.6

11382.1

Nasdaq 100

1.7

2191.2

Dax Xetra

1.4

6947.7

Cac 40

.6

3750.6

Foreign Exchange

Euro/dollar : the pair has broken below its MT rising trend line and should face a further weakness. SHORT below 1.38 towards 1.29 & 1.26.

Dollar/yen : the pair has broken above its MT bearish channel upper boundary and should post a further up move. LONG @ 80.70 with 86 or even 88 in sight.

 

 

Company preview

border=0 Micro Focus International (GBp 356 ; 6.68% ; MCRO ; MCRO.L)
Wednesday, Micro Focus International, an enterprise application management solutions provider, is expected to deliver 1H pre-tax profit of $74m compared to around $39m a year ago on revenues of $216m vs $198m. Earlier, the Co received a contract to provide a software application development pilot program for the US Internal Revenue Service. From a technical point of view, the stock bounced off from its support base around 325p and may test its nearest resistance at 365p before further upsides towards 400p.

border=0 Stagecoach Group (GBp 204.2 ; 2.2% ; SGC ; SGC.L)
The same day, Stagecoach Group may announce 1H pre-tax profit of 104m compared to 67.3m a year earlier on revenues of 1.18bln vs 1.1bln. Last week, the Co confirmed to invest around 2.3m in a fleet of 17 state-of-the-art greener hybrid diesel electric buses for Scotland. The Co's price target was raised to 240p vs 230p with a "buy" rating unchanged at Deutsche Bank. Technically, the stock remains supported by its rising 50D MA. Above 200p, look for a further rise to 216p and 225p in extension.

Costco Wholesale (USD 68.39 ; 1.74% ; COST ; COST.O)
On Wednesday, in the US, Costco Wholesale could release 1Q EPS of $0.69 compared to $0.6 last year on sales of $18.8bln vs $17.3bln. A week ago, the Co reported net sales of $6.78bln for the month of November, an increase of 12% from around $6bln during the similar period last year. Recently, the Co's price target was raised to $71 vs $70 at Goldman Sachs. Graphically, the stock price is still on the upside above its bullish 20D & 50D MAs, a further bounce is therefore expected to $72.5 at first after a ST consolidation.

border=0 Pall (USD 47.6 ; 3.43% ; PLL ; PLL.N)
On Thursday, Pall Corp is expected to unveil 1Q EPS of $0.5 compared with $0.46 a year ago on sales of $587m vs $547m. Recently, Moody's assigned a ST rating for commercial paper of Prime-2 to the Co and affirmed the Co's Baa1 senior unsecured rating with a "stable" outlook. From a technical view, the stock achieved a new YTD high last week. The ascending short-term moving average remains as a support and should push the price up towards $50.

National Semiconductor (USD 14.77 ; 8.28% ; NSM ; NSM.N)
The same day, National Semiconductor, the US technology company, may post 2Q EPS of $0.32 vs $0.21 a year ago on sales of appx. $400m vs $345m. Earlier, the Co's price target was raised to $16 from $15 at Citigroup. From a chartist view, the stock gapped up and surged last Friday following the bullish breakout of a MT declining trend line. A test of $15 should be in sight before a new leg up to $15.5 and then to $16.

Selection of those events which may affect the stock prices of international Large Caps

Corporate Calendar December 6th - December 10th

Date

Market

Company

Event

Monday, December 6th

   

No major earnings

 

Tuesday, December 7th

 

UK

Victrex Plc

annual results

 

US

Autozone

1st-Quarter results

 

US

H&R Block

2nd-Quarter results

Wednesday, December 8th

 

UK

Micro Focus International

1st-Half results

 

UK

Stagecoach Group

1st-Half results

 

SW

Elekta Instrument AB

2nd-Quarter results

 

US

Costco Wholesale

1st-Quarter results

 

US

SAIC Inc

3rd-Quarter results

Thursday, December 9th

 

US

Pall

1st-Quarter results

 

US

Brown Forman (B)

2nd-Quarter results

 

US

National Semiconductor

2nd-Quarter results

Friday, December 10th

   

No major earnings

 


Economic Calendar (CET) December 6th - December 10th

Date

Market

Economic data

Period

Expected

Last

Monday, December 6th

   

No major economic event

     

Tuesday, December 7th

 

UK

GDP Estimate (NIESR)

NOV

NA

0.5%

10:30:00

UK

Industrial Production (MoM)

OCT

0.3%

0.4%

10:30:00

UK

Manufacturing Production (MoM)

OCT

0.3%

0.1%

21:00:00

US

Consumer Credit (Bln)

OCT

-.5

2.1

Wednesday, December 8th

08:00:00

GE

Current Account (Bln)

OCT

14.2

14

08:00:00

GE

Trade Balance (Bln)

OCT

15.2

16.8

08:45:00

FR

Central Govt. Balance (Bln)

OCT

NA

-124.166

08:45:00

FR

Trade Balance (Mln)

OCT

NA

-4683

12:00:00

GE

Industrial Production (MoM)

OCT

1%

-0.8%

16:30:00

US

Crude Oil Inventories (WoW chg)

W48

NA

1066

Thursday, December 9th

07:30:00

FR

Non-Farm Payrolls (QoQ)

4Q

NA

0.3%

08:00:00

GE

Consumer Price Index (MoM)

SEP

0.1%

0.1%

10:30:00

UK

Trade Balance Non EU25 (Mln GBP)

OCT

-4502.34

-4590

13:00:00

UK

BoE: Rates decision

 

0.5%

0.5%

14:30:00

US

Initial Jobless Claims (Thsd)

W48

423

436

16:00:00

US

Wholesale Inventories

OCT

1%

1.5%

Friday, December 10th

08:00:00

GE

Wholesale Price Index (MoM)

NOV

NA

-0.3%

10:30:00

UK

PPI - Input (MoM)

NOV

0.6%

2.1%

10:30:00

UK

PPI - Output (MoM)

NOV

0.4%

0.6%

14:30:00

US

Trade Balance (Bln)

OCT

-43.9

-44

15:55:00

US

U. of Michigan Confidence

NOV

72

71.6

20:00:00

US

Monthly Budget Satement (Bln)

NOV

-129.9

-140.4

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