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Market Outlook - 22nd - 26th August PDF Print E-mail

Market Outlook

- WALL STREET:
US indices lost ground for the fourth consecutive week. On the economic data front, US consumer price index increased 0.5% in July (+0.2% exp.). Producer Price Index rose 0.2% (+0.1% expected) in July, while housing starts fell 1.5% to a 604,000 annual rate in July and industrial production rose 0.9% (+0.5% exp.) in July. Also, Fitch Ratings affirmed its AAA rating for the USA. Regarding US stocks, Hewlett Packard announced the acquisition of UK software firm Autonomy for $10.3B. Wal-Mart 2Q net sales increased 5.5% YoY to $108.6B. Google has agreed to buy Motorola Mobility for a total of appx. $12.5B. Most sectors declined last week, with automobiles & components (-11.09%) and consumer durables (-8.34%) posting the weakest performance, while utilities and food and staples retailing rose most. From a chartist view, the S&P500 is pulling back again to its support at 1100, and should re-test it before any further pullbacks.

- EUROPE:
In the UK, the FTSE 100 fell 5.25% last week. Technically, the index is still under presurre below its bearish 20D MA. Even though a technical rebound cannot be ruled out, its extent should be limited. Looking at economic data, UK July CPI was flat vs -0.1% in June. Jobless claims rose 37.1K in July vs +31.3K in June and ILO unemployment rate rose to 7.9% during 2Q vs 7.7% in 1Q11. Retail sales w/ auto fuel rose 0.2% in July after a 0.8% increase in June. In Europe, euro-zone GDP gained 0.2% in 2Q QoQ (+0.3% expected) after a 0.8% increase in 1Q, while euro-zone consumer prices were down 0.6% MoM in July, after being unchanged in June. All sectors tumbled last week. Automobiles & parts fell 11.63% and banks lost 9.26%. From a chartist view, the Stoxx 600 index is challenging its key support at 220. The risk is a slide below this threshold, which should call for further decline to 215 and 195 in extension.

 

  August 22nd - August 26th

border=0 Market Round up

 

Weekly chg (%)

Last

Dow Jones

-4

10817.7

Nasdaq 100

-6.6

2038.2

Dax Xetra

-8.6

5480

Cac 40

-6.1

3017

border=0 Foreign Exchange

Euro/dollar : the pair has rebounded on its support and is challenging its declining trend line. LONG above 1.395 towards 1.4700 & 1.4900.

Dollar/yen : the pair remains under pressure and is challenging its previous low. SHORT below 79.5 with 75.3 or even 73.75 in sight.

Company preview

border=0 Wood Group (John) Plc (GBp 507.5 ; -9.21% ; WG/ ; WG.L)
On Tuesday, Wood Group (John) Plc, an international energy service company, is expected to deliver 1H pre-tax profit of $154M compared with $123M a year earlier on revenues of around $2.8B vs $2.4B. Last week, the Co was downgraded to "neutral" from "overweight" at JPMorgan. From a technical view, the stock remains under pressure below its falling 20-day moving average. Below 580p, look for a further pullback to 455p at first.

border=0 Accor (EUR 23.11 ; -9.34% ; AC ; ACCP.PA)
On Wednesday, Accor may announce 1H net income of E81M compared to a loss of E15M a year ago on sales of around E3B vs E2.85B. Early this month, the Co signed a contract to sell caterer Lenotre to Sodexo and expected to complete the sale by the end of September. Technically, the stock is pulling back to its key support level at E22. A technical rebound is therefore expected to E25.5 in sight before any further downsides.

border=0 Heineken (EUR 36.065 ; -3.7% ; HEIA ; HEIN.AS)
The same day, Heineken, the European beverages producer and distributor, is expected to release 1H net income of around E737M compared with E695M a year ago on revenues of E8.3B vs E7.5B. Recently, the Co completed the acquisitions of the Bedele and Harar breweries from the government of the Federal Democratic Republic of Ethiopia for US$85M and US$78M, respectively. Graphically, the stock broke below a MT rising trend line, and should post further decline towards E34, as long as E38 is resistance.

border=0 BHP Billiton (GBp 1860 ; -7.83% ; BLT ; BIL.J)
Wednesday, BHP Billiton, the international mining giant, could post FY pre-tax profit of $31.8B compared with appx. $20B last year. Earlier, the Co agreed with Leighton Holdings to buy the HWE Mining subsidiaries that provide contract mining services to its Western Australia Iron Ore operations for $735M. Recently, the Co closed the tender offer to acquire all outstanding shares of of Petrohawk Energy at US$38.75 per share. From a chartist view, the stock reached its support base around 1800p, and should post some technical rebounds to 2000p ahead of new weakness.

border=0 Crédit Agricole (EUR 6.122 ; -6.09% ; ACA ; CAGR.PA)
On Thursday, Crédit Agricole, the French bank, may report 2Q net income of E84M compared to E379M a year ago. Last week, the bank was downgraded to "sell" from "hold" at Standard & Poor's. Recently, the bank planned to close its office in Bahrain and move its staff to Dubai. From a technical point of view, the share price remains negatively oriented, being capped by its bearish 20-day moving average. The stock should test its support at E6.00 in sight, if breakout, expect a new down move towards E5.50.

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


Corporate Calendar August 22nd - August 26th

Date

Market

Company

Event

border=0 Monday, August 22nd

 

DE

Jyske Bank

2nd-Quarter results

 

UK

Amlin Plc

1st-Half results

 

UK

Essar Energy

1st-Half results

 

UK

Petrofac Ltd

1st-Half results

border=0 Tuesday, August 23rd

 

SZ

Lindt & Spruengli

1st-Half results

 

UK

Cairn Energy

1st-Half results

 

UK

Persimmon

1st-Half results

 

UK

Wood Group (John) Plc

1st-Half results

 

US

HJ Heinz

1st-Quarter results

 

US

Medtronic

1st-Quarter results

border=0 Wednesday, August 24th

 

FR

Accor

1st-Half results

 

NE

Heineken

1st-Half results

 

UK

Antofagasta

1st-Half results

 

UK

BHP Billiton

annual results

 

UK

WPP Group

1st-Half results

 

US

Applied Materials

3rd-Quarter results

border=0 Thursday, August 25th

 

FR

Crédit Agricole

1st-Half results

 

IT

Banca Popolare Di Milano

1st-Half results

 

NE

Ahold

1st-Half results

 

UK

Diageo

annual results

 

UK

Premier Oil Plc

1st-Half results

 

US

Patterson Cos

1st-Quarter results

border=0 Friday, August 26th

 

FR

Essilor

1st-Half results

 

IT

Banca Monte Dei Paschi Siena

1st-Half results

 

IT

Banco Popolare

1st-Half results

 

IT

Prysmian

1st-Half results

 

UK

Heritage Oil

1st-Half results

 

US

Tiffany & Co

2nd-Quarter results


Economic Calendar (CET) August 22nd - August 26th

Date

Market

Economic data

Period

Expected

Last

border=0 Monday, August 22nd

   

No major economic event

     

border=0 Tuesday, August 23rd

11:00:00

GE

Zew Survey (Econ. Sentiment)

AUG

NA

-15.1

11:00:00

GE

Zew Survey (Current Situation)

AUG

NA

90.6

16:00:00

EC

Euro-Zone: Consumer Confidence

JUL

NA

-11.2

16:00:00

US

New Home Sales (Thsd)

JUL

315.81

312

border=0 Wednesday, August 24th

10:00:00

GE

IFO - Business Climate

SEP

NA

112.9

10:00:00

GE

IFO - Current Assessment

AUG

NA

121.4

10:00:00

GE

IFO - Expectations

AUG

NA

105

14:30:00

US

Durable Goods Orders

JUL

2.3%

-1.9%

14:30:00

US

Durable Goods Ex Transportation

JUL

-0.5%

0.4%

16:30:00

US

Crude Oil Inventories (WoW chg)

W33

NA

4233

border=0 Thursday, August 25th

13:59:00

GE

Import Prices (MoM)

SEP

NA

-0.6%

border=0 Friday, August 26th

10:30:00

UK

GDP (QoQ)

2Q

NA

0.2%

13:59:00

GE

Retail Sales (MoM)

APR

NA

4.5%

14:30:00

US

GDP (QoQ)

2Q

1.1%

1.3%

14:30:00

US

GDP Price (QoQ)

2Q

2.3%

2.3%

14:30:00

US

Personal Consumption

2Q

NA

0.1%

15:55:00

US

U. of Michigan Confidence

AUG

57.2

54.9


 


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.

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