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Market Outlook 11th October - 15th October PDF Print E-mail

 

Market Outlook

- WALL STREET:
US indices rose last week despite IMF cut 2011 growth forecast for both world to 4.2% from 4.3% and advanced economies to 2.2% from 2.4%. On the US economic front, August Factory Orders declined 0.5% (-0.4% expected) but were substantially revised higher for July to +0.5% from an initial estimation of +0.1%. August Pending Home Sales grew 4.3% MoM (+2.5% expected) vs. +4.5% in July (revised lower from +5.2%). However, on a yearly basis, Pending Home Sales are down 18.4% in August vs. -20.7% in July. September ISM non-manufacturing rose to 53.2 (52 expected) from 51.5 and August Wholesale Inventories rose 0.8% (+0.5% expected) vs. +1.5% in July (revised higher from +1.3%). Regarding the job market, Weekly jobless claims fell to 445k (455k expected) from 456k however, Change in Nonfarm Payrolls fell 95k (-5k expected) vs. -57k for the previous month. Finally, unemployment rate stayed at 9.6% (9.7% expected). Regarding sectors, automobiles & components jumped 9.12% and was the best performing sector, material followed far behind with a 3.24% weekly gain. On the opposite, telecommunication services declined 1.4% while health care equipment ended slightly negative, the above mentioned were the only two sectors ending the week in the negative territory. Regarding S&P 500 technical outlook, the upside breakout of the 1125 former resistance area opened the way towards 1198 & even 1220. Only a break below 1110 would invalidate this scenario and favour a correction towards 10410 initially.

- EUROPE:
European indices gained some ground last week with the Ibex 35 advancing 2.59% followed by a 1.93% gain for the Cac 40. OMX and AEX lagged behind, adding less than 1%. Regarding sectors, chemicals and basic resources rose around 3.5% during the past week, whereas, technology, retail and oil & gas stocks ended the week in the red. Technically, the Stoxx 600 is lacking momentum and has a weak bullish bias above 252 which could help with reaching the 267.5 & even 272.5 resistance area.

October 11th - October 15th

Market Round up

 

Weekly chg (%)

Last

Dow Jones

1.6

11006.5

Nasdaq 100

1.5

2027

Dax Xetra

1.3

6291.7

Cac 40

1.9

3763.2

Foreign Exchange

Euro/dollar : the pair has broken above its previous high and should reach its next resistance as the RSI is well directed. LONG above 1.3025 towards 1.4050 & 1.4250.

Dollar/yen : the pair has struck against its bearish channel upper boundary and should face a further weakness. SHORT @ 85.8 with 80.50 or even 79 in sight.

Company preview

Intel (USD 19.52 ; 1.04% ; INTC ; INTC.O)
On Tuesday, Intel Corp is expected to deliver 3Q EPS of $0.5 compared with $0.34 a year ago on sales of $11bln vs $9.4bln. Recently, the Co's CEO Paul Otellini could sign a memorandum of understanding with Taiwan on developing cloud computing technology. Last month, the Co reduced its prices for Core i5 and Core i7 chips. Technically, the stock is currently testing the upper boundary of its MT bearish channel. Only the breakout of $20 should open the upside way to $21 and then to $21.8.

ASML Holding (EUR 21.065 ; -2.88% ; ASML ; ASML.AS)
Wednesday in Europe, ASML Holding may release 3Q net income of E246m compared to E239m a year earlier on revenues of E1.1bln, almost unchanged YoY. Earlier, the Co sold NT$4.2bln of equipment to Taiwan Semiconductor Manufacturing Co and E15m of equipment to Macronix International. Last week, the stock price was cut to E23 from E25 at ING. From a technical view, the shares are still under pressure below a major resistance at E22. Below this level, a further down move is more likely to E20 and E19.3.

JP Morgan Chase (USD 39.31 ; 1.29% ; JPM ; JPM.N)
The same day, JPMorgan could publish 3Q EPS of $0.88 compared with $0.82 last year. Early this month, the bank agreed to spend $220m to purchase RBS Group and Sempra Energy's North American assets. A week ago, the Co reached an agreement to fund an estimated $60m in project financing for SunEdison deployments across key markets in the US. Graphically, the stock is moving within a MT trading range between $41.5 and $36 and may test the upper boundary in the forthcoming days.

Google (USD 536.35 ; 2.04% ; GOOG ; GOOG.O)
On Thursday, Google is expected to post 3Q EPS of $6.65 vs $5.13 a year ago on sales of $5.2bln vs $5.9bln. A few days ago, the Co acquired BlindType Inc, a startup company for an undisclosed price. The Co's price target was raised to $625 vs $600 at Goldman Sachs. From a technical view, the Co has already formed a MT "double-bottom" pattern following an upside breakout of its neckline at $510. Hence, a new up leg will probably occur towards $570.

border=0 General Electric (USD 17.12 ; 4.65% ; GE ; GE.N)
Friday, General Electric, a diversified technology, media and financial services company, could announce 3Q EPS of $0.27, in line with last year on sales of $37.5bln vs $37.3bln. Recently, the Co agreed to purchase Dresser, an oil-field equipment maker for $3bln. Earlier, Wellstream Holdings rejected the Co's £755m takeover offer. Technically, the stock remains well positively oriented above its rising 20D MA. Above $16.5, look for a further bounce to $18 and $18.5 in extension.

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


Corporate Calendar October 11th - October 15th

Date

Market

Company

Event

Monday, October 11th

   

No major earnings expected

 

Tuesday, October 12th

 

IR

C&C Group

1st-Half results

 

US

Fastenal

3rd-Quarter results

 

US

Linear Technology

1st-Quarter results

 

US

CSX

3rd-Quarter results

 

US

Intel

3rd-Quarter results

Wednesday, October 13th

 

NE

ASML Holding

3rd-Quarter results

 

NO

Acergy Sa

3rd-Quarter results

 

SW

Investor (B)

3rd-Quarter results

 

US

Host Hotels & Resorts Inc

3rd-Quarter results

 

US

JP Morgan Chase

3rd-Quarter results

 

US

Apollo Group

4th-Quarter results

Thursday, October 14th

 

GE

Suedzucker

2nd-Quarter results

 

US

Safeway

3rd-Quarter results

 

US

Google

3rd-Quarter results

 

US

Progressive

3rd-Quarter results

 

US

WW Grainger

3rd-Quarter results

 

US

Advanced Micro Devices

3rd-Quarter results

 Friday, October 15th

 

US

First Horizon National

3rd-Quarter results

 

US

Genuine Parts

3rd-Quarter results

 

US

General Electric

3rd-Quarter results

 

US

Gannett

3rd-Quarter results

 

US

Mattel

3rd-Quarter results

 

US

Charles Schwab

3rd-Quarter results


Economic Calendar (CET) October 11th - October 15th

Date

Market

Economic data

Period

Expected

Last

Monday, October 11th

   

No major economic report

     

 Tuesday, October 12th

08:00:00

GE

Wholesale Price Index (MoM)

SEP

NA

.016

08:00:00

GE

Consumer Price Index (MoM)

SEP

-.001

-.001

08:45:00

FR

Current Account (Mln)

AUG

NA

-2.2

10:30:00

UK

Trade Balance Non EU25 (Mln GBP)

AUG

-4383.57

-4800

10:30:00

UK

CPI - EU Harmonised (MoM)

SEP

.001

.005

10:30:00

UK

Visible Trade Balance (Mln GBP)

AUG

-7962.46

-8667

border=0 Wednesday, October 13th

07:30:00

FR

Consumer Price Index (MoM)

SEP

0.1%

0.2%

07:30:00

FR

CPI - EU Harmonised (MoM)

SEP

0.1%

0.2%

10:30:00

UK

Unemployment Rate (ILO)

AUG

7.8%

7.8%

11:00:00

EC

Euro-Zone: Industrial Production (MoM)

AUG

0.6%

0.1%

 Thursday, October 14th

14:30:00

US

Initial Jobless Claims (Thsd)

W40

NA

445

14:30:00

US

Producer Price Index (MoM)

SEP

0.2%

0.4%

14:30:00

US

Trade Balance (Bln)

AUG

-43.4

-42.8

14:30:00

US

PPI - Ex Food & Energy (MoM)

SEP

0.1%

0.1%

17:00:00

US

Crude Oil Inventories (WoW chg)

W40

NA

308

 Friday, October 15th

14:30:00

US

Empire Manufacturing

OCT

6.7

4.1

14:30:00

US

Consumer Price Index (MoM)

SEP

.002

.003

14:30:00

US

Retail Sales

SEP

.004

.004

14:30:00

US

Retail Sales less Autos

SEP

.003

.006

14:30:00

US

CPI - Ex Food & Energy (MoM)

SEP

.001

0

15:55:00

US

U. of Michigan Confidence

SEP

68.8

68.2


 

This document does not constitute financial advice. If you require such advice, you should seek appropriate professional advice. Internaxx accepts no responsibility for the content of this newsletter. Investors are not authorized to copy, reproduce, duplicate, sell, resell or exploit any portion of the Newsletter for their own commercial purposes. In that case, Internaxx will immediately end the subscription.

INTERNAXX

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