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Market Outlook - 24th - 28th October PDF Print E-mail

Market Outlook

- WALL STREET:
US indices closed mixed last week. On the economic front, Consumer Price Index rose 0.3% MoM and 3.9% YoY in September as expected while housing starts jumped 15% to a 658,000 annual rate. Regarding the Beige Book, reports indicated that overall economic activity continued to expand in September, although contacts generally noted weaker or less certain outlooks for business conditions. Looking at US earning releases, Microsoft posted a 1Q EPS of $0.68 as expected. Apple posted 4Q EPS of $7.04 vs $7.31 expected and forecast 1Q EPS about $9.30 vs $9.02 expected. All sectors closed higher, except for software, materials, technology hardware and equipment. Insurance and diversified financial had the performance. From a technical view, the S&P500 index broke its key resistance at 1230 last week, which should open the upside way to 1250, and possibly 1255.

- EUROPE:
In the UK, the FTSE 100 was slightly up. Technically, the index broke above its downward resistance. Key moving averages are heading up and should maintain upside momentum. Hence, expect further gains towards 5555. On the economic front, UK Nationwide consumer confidence fell to 45 in September vs 48 in August while retail sales ex auto fuel rose 0.7% MoM in September more than expected. CPI remained at 0.6% MoM in September. Also, the Bank of England warned that growth is likely to flat-line in the final quarter. Monetary Policy Committee will consider quantitative easing measures. In Europe, in Germany, ZEW Survey (Economic Sentiment) was down to -48.3 in October from -43.3 in September. Also, Spain's credit rating was downgraded to "A1" from "Aa2" at Moody's with negative outlook unchanged. Regarding sectors, oil & gas, personal & household goods rose most, while basic resources and utilities had the weakest performance. Technically, the Stoxx 600 index remains above its 20D MA, which crossed the 50D MA last week. The index will keep challenging its key level at 240, if breakout, look for a further rise to 250.

 

  October 24th - October 28th

border=0 Market Round up

 

Weekly chg (%)

Last

Dow Jones

1.4

11808.8

Nasdaq 100

-1.5

2335.9

Dax Xetra

.1

5971

Cac 40

-1.4

3171.3

border=0 Foreign Exchange

Euro/dollar : the pair is posting a rebound but stands below its new resistance, the RSI lacks upward momentum. SHORT below 1.40 with 1.35 & even 1.3150 in sight.

Dollar/yen : the pair remains under pressure and is challenging its previous low. SHORT below 79.5 with 75.95 or even 73.75 in sight.

Company preview

border=0 BP (GBp 437.05 ; 2.7% ; BP/ ; BP.L)
Tuesday, BP, the British oil company, is expected to report 3Q EPS of $0.266, up from $0.20 in 3Q10 on sales of $120.3B, vs $101B in 2Q11 and $70.6B in 3Q10. The Co announced earlier this month that it reached an agreement with Anadarko Petroleum to settle all claims between the Co related to the Deepwater Horizon accident. Anadarko will pay $4B to BP and will no longer pursue its allegations of gross negligence with respect to BP. Technically, the stock has just broken above the neckline of its "double-bottom" pattern at 420p, which should open the upside way to 460p and 475p.

border=0 Glaxosmithkline (GBp 1396 ; 1.49% ; GSK ; GSK.L)
Wednesday, GlaxoSmithKline Plc, the drug manufacturer, may announce 3Q EPS of £0.28 and revenue of £7.0B, compared to EPS of £0.27 and revenue of £6.8B a year earlier. The drug manufacturer announced a strategic partnership with McLaren Group, which will share its capabilities in engineering and strategy modelling. The Co was downgraded to "equalweight" from "overweight" at Barclays. From a chartist view, the price remains well positively oriented, and is also supported by a ST bullish trend line. As long as 1,320p is not broken, look for a new bounce to 1,475p and then to 1,500p.

border=0 Boeing (USD 64.59 ; 1.1% ; BA ; BA.N)
On the same day, Boeing, the aircraft manufacturer, could unveil 3Q diluted EPS of $1.097, down from $1.12 a year earlier, and revenues of $17.9B, vs $17.0B. Earlier this month, the Co delivered its first 787 Dreamliner aircraft. In other news, Boeing announced it began to raised 737 production rate to 35 airplanes a month. Graphically, the stock moves sideways between $65.50 and $57.50, but remains under pressure below its declining 100D MA. Hence, the return to the lower boundary of its MT range pattern is more likely in the coming days.

border=0 Ford Motor (USD 12.26 ; 6.06% ; F ; F.N)
Also on Wednesday, Ford, the US car manufacturer, is expected to release 3Q EPS of $0.44, vs $0.43 in 3Q10, on sales of $30.5B, compared to $29.9B a year earlier. The Co said it reached an agreement with the UAW. Ford will commits to add 12,000 manufacturing jobs in its U.S. by 2015 and invest $16 billion in the U.S. From a technical view, the stock is currently challenging a MT downside trend line, if breakout, look for a bullish acceleration to $12.7 at first.

border=0 BASF (EUR 51.05 ; 1.09% ; BAS ; BASF.DE)
Thursday, BASF SE, the German chemical company could report 3Q EPS of E1.35 same as in the same year-earlier period, on revenue if E17.6B, compared to E15.8B. BASF SE and INEOS AG said on October 4, that they received approvals from all relevant antitrust authorities for the formation of the joint venture Styrolution. The Co is expected to be in leading position in the global styrenics market. Technically, the stock failed to break above its key resistance at E53, and should post some consolidations in sight before any further upsides.

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


Corporate Calendar October 24th - October 28th

Date

Market

Company

Event

border=0 Monday, October 24th

 

IT

Luxottica Group

3rd-Quarter results

 

IT

STMicroelectronics

3rd-Quarter results

 

US

Caterpillar

3rd-Quarter results

 

US

Kimberly Clark

3rd-Quarter results

 

US

NetFlix

3rd-Quarter results

 

US

Texas Instruments

3rd-Quarter results

border=0 Tuesday, October 25th

 

SZ

Novartis

3rd-Quarter results

 

SZ

UBS

3rd-Quarter results

 

UK

BP

3rd-Quarter results

 

US

3M

3rd-Quarter results

 

US

Du Pont De Nemours

3rd-Quarter results

 

US

UPS

3rd-Quarter results

border=0 Wednesday, October 26th

 

GE

SAP

annual results

 

SP

BBVA

3rd-Quarter results

 

UK

Glaxosmithkline

3rd-Quarter results

 

US

Boeing

3rd-Quarter results

 

US

Ford Motor

3rd-Quarter results

 

US

Visa Inc

4th-Quarter results

border=0 Thursday, October 27th

 

GE

Volkswagen-Prf

3rd-Quarter results

 

IT

ENI

3rd-Quarter results

 

GE

Bayer

3rd-Quarter results

 

UK

Royal Dutch Shell

3rd-Quarter results

 

US

Exxon Mobil

3rd-Quarter results

 

US

Colgate Palmolive

3rd-Quarter results

border=0 Friday, October 28th

 

GE

Linde

3rd-Quarter results

 

FR

Total

3rd-Quarter results

 

IT

Fiat

3rd-Quarter results

 

SW

Electrolux

3rd-Quarter results

 

US

Merck & Co

3rd-Quarter results

 

US

Chevron

3rd-Quarter results


Economic Calendar (CET) October 24th - October 28th

Date

Market

Economic data

Period

Expected

Last

border=0 Monday, October 24th

   

No major economic event

     

border=0 Tuesday, October 25th

10:30:00

UK

Current Account (Bln)

2Q

-10.729

-9.354

16:00:00

US

Consumer Confidence

OCT

46.62

45.4

border=0 Wednesday, October 26th

13:59:00

GE

Retail Sales (MoM)

APR

NA

-2.7%

14:30:00

US

Durable Goods Orders

SEP

-0.8%

-0.1%

14:30:00

US

Durable Goods Ex Transportation

SEP

0.4%

-0.1%

16:00:00

US

New Home Sales (Thsd)

SEP

299.85

295

16:30:00

US

Crude Oil Inventories (WoW chg)

W42

NA

-4729

border=0 Thursday, October 27th

11:00:00

EC

Euro-zone: Industrial Confidence

OCT

NA

-5.9

11:00:00

EC

Business Climate Indicator

OCT

NA

-0.06

11:00:00

EC

Euro-Zone: Economic Confidence

OCT

NA

95

12:59:00

GE

CPI - EU Harmonised (MoM)

SEP

NA

0.2%

14:30:00

US

GDP (QoQ)

2Q

2.4%

1.3%

14:30:00

US

GDP Price (QoQ)

2Q

2.5%

2.5%

border=0 Friday, October 28th

14:30:00

US

Personal Income

SEP

0.3%

-0.1%

14:30:00

US

Personal Spending

SEP

0.6%

0.2%

15:55:00

US

U. of Michigan Confidence

OCT

57.9

57.5


 


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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