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Market Outlook 25th - 29th July PDF Print E-mail

 

Market Outlook

- WALL STREET:
US indices rebounded last week, with the Nasdaq 100 index gaining over 3%. On the economic front, housing starts jumped 14.6% (+2.7% exp.) while building permits rose 2.5% (-2.3% exp.) in June. The Thomson Reuters/University of Michigan preliminary index of consumer sentiment also fell to 63.8 (72.2 exp.) in July. Regarding sectors, all sectors finished higher last week, except for household and personal products and telecommunication services. Banks led the rally, gaining 5.61%, followed by technological hardware and equipment (+5.29%). Semiconductors, diversified financials and energy climbed more than 3%. Technically, the S&P500 index bounced off from its 20D MA last week, but is very close to its key resistance zone around 1350-1370. Hence, a ST consolidation cannot be ruled out before any further upsides.

- EUROPE:
In the UK, the FTSE100 gained ground last week. From a chartist view, the index is still moving within its MT range between 6100 and 5600, and may test the upper boundary at first. Looking at economic data, UK retail sales (ex auto fuel) were up 0.8% MoM in June vs a 1.5% decrease in May and UK house prices fell 1.6% in July MoM after a 0.6% increase the month before. Bank of England officials voted 7-2 to maintain rates in July. In the rest of Europe, the FTSE MIB jumped 5.48% while the IBEX climbed 6.06%. Euro zone PMI services was 51.4 in July vs 53.7 in June, while July PMI manufacturing fell to 50.4 from 52. Separately, Euro-area leaders announced E159B in new aid for Greece. Looking at sectors, banks rose most by 5.74%. Insurance, telecommunications, utilities added over 3%. On the opposite, only automobiles and parts (-1.07%) and chemicals (-0.22%) finished lower. From a technical view, the Stoxx 600 holds above 262, a MT important support threshold, and is expected to challenge a downside trend line before a new bounce towards 281.70.

 

  July 25th - July 29th

border=0 Market Round up

 

Weekly chg (%)

Last

Dow Jones

1.6

12681.2

Nasdaq 100

3.1

2429.5

Dax Xetra

1.5

7326.4

Cac 40

3.1

3842.7

border=0 Foreign Exchange

Euro/dollar : the pair has failed to break below its support and thus remains on the upside, the RSI is supported by a rising trend line. LONG above 1.3950 towards 1.4450 & 1.47.

Dollar/yen : the pair has broken below its support and is approaching its previous low. SHORT below 82.5 with 78.25 or even 76.50 in sight.

Company preview

border=0 UBS (CHF 14.31 ; 4.45% ; UBSN ; UBSN.VX)
On Tuesday, UBS, a European financial services company, is expected to deliver 2Q net income of around SF1.3B compared to SF2B a year earlier. Recently, the Co may consider cutting around 5,000 jobs to save SF1B, according to Swiss newspaper Tages-Anzeiger. Earlier, the Co's price target was cut to SF14 from SF18 at Societe Generale with the "hold" rating unchanged. Technically, the stock remains under pressure below a declining 50D MA, but is currently posting a technical rebound. As long as SF15 is not surpassed, the upside potential seems to be limited before a new pullback towards SF13.

border=0 BP (GBp 470.35 ; 2.47% ; BP/ ; BP.L)
The same day, BP, the UK oil and petrochemicals giant, may announce 2Q pre-tax profit of $9B compared with a loss before tax of $24.3B a year ago. Last week, the Co won Indian regulatory approval to acquire stakes in Reliance Industries' oil and natural gas blocks. The deal is valued at around $7.2B. From a technical view, the stock price has just broken above a ST horizontal resistance, and also stands well above its bullish 20D MA. Further advance is more likely to challenge 500 in the coming weeks.

border=0 ArcelorMittal (EUR 22.92 ; 1.17% ; MT ; MT.AS)
On Wednesday, ArcelorMittal, the world's largest steel producer, is expected to release 2Q net income of appx. $1.3B compared to $1.7B last year. Earlier, the Co and Peabody Energy confirmed that they submitted a joint indicative proposal to acquire Macarthur Coal. Under the proposal, Macarthur shareholders would be offered a cash price of A$15.50 per share through an off-market takeover offer. Graphically, the stock is rebounding on its key support base around 22, which should allow for a ST stabilization. Above E22, look for further upsides to E24 and E25 in extension.

border=0 Boeing (USD 72.67 ; 1.95% ; BA ; BA.N)
On the same day in the US, Boeing could post 2Q EPS of $0.97 compared with $1.06 a year earlier on sales of appx. $16.5B vs $15.6B. A week ago, the Co announced an agreement to acquire Solutions Made Simple Inc, an information services provider for the US government and the Intelligence Community. From a chartist view, the stock is still under pressure below its key resistance around $75. Even though a technical rebound cannot be ruled out, its extent should be limited ahead of a further decline to $70 and then to $67.5.

border=0 Exxon Mobil (USD 85.22 ; 2.67% ; XOM ; XOM.N)
On Thursday, Exxon Mobil, the US oil & gas giant, may post 2Q EPS of around $2.33 compared to $1.60 a year ago. Recently, the Co could consider selling part of its retail business in Malaysia. Earlier, the Co offered a 50% stake in its Kalimantan coalbed-methane project, and planned to seek partners to develop natural gas in Indonesia. From a technical view, the stock is well positively oriented above a rising 20-day moving average, and is expected to challenge $88 (its YTD high) in the forthcoming days.

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


Corporate Calendar July 25th - July 29th

Date

Market

Company

Event

border=0 Monday, July 25th

 

IR

Ryanair

1st-Quarter results

 

IT

Luxottica Group

1st-Half results

 

IT

STMicroelectronics

1st-Half results

 

UK

Reckitt Benckiser

1st-Half results

 

US

Kimberly Clark

2nd-Quarter results

 

US

Texas Instruments

2nd-Quarter results

border=0 Tuesday, July 26th

 

FR

LVMH

1st-Half results

 

SZ

UBS

2nd-Quarter results

 

UK

BP

2nd-Quarter results

 

UK

Glaxosmithkline

1st-Half results

 

US

Amazon.com

2nd-Quarter results

 

US

UPS

2nd-Quarter results

border=0 Wednesday, July 27th

 

FR

Peugeot

1st-Half results

 

GE

Daimler

2nd-Quarter results

 

NE

ArcelorMittal

2nd-Quarter results

 

US

Boeing

2nd-Quarter results

 

US

ConocoPhillips

2nd-Quarter results

 

US

Visa Inc

3rd-Quarter results

border=0 Thursday, July 28th

 

FR

Alcatel - Lucent

1st-Half results

 

GE

Siemens

3rd-Quarter results

 

SZ

Credit Suisse

2nd-Quarter results

 

UK

Royal Dutch Shell

1st-Half results

 

US

Sprint Nextel

2nd-Quarter results

 

US

Exxon Mobil

2nd-Quarter results

border=0 Friday, July 29th

 

FR

EADS

1st-Half results

 

FR

Michelin

1st-Half results

 

FR

PPR

1st-Half results

 

FR

Total

2nd-Quarter results

 

US

Chevron

2nd-Quarter results

 

US

Merck & Co

2nd-Quarter results


Economic Calendar (CET) July 25th - July 29th

Date

Market

Economic data

Period

Expected

Last

border=0 Monday, July 25th

13:59:00

GE

Retail Sales (MoM)

APR

NA

-2.5%

border=0 Tuesday, July 26th

10:30:00

UK

GDP (QoQ)

1Q

NA

0.5%

16:00:00

US

New Home Sales (Thsd)

JUN

319.3

319

16:00:00

US

Consumer Confidence

JUL

57.86

58.5

border=0 Wednesday, July 27th

12:59:00

GE

Consumer Price Index (MoM)

JUN

NA

0.1%

12:59:00

GE

CPI - EU Harmonised (MoM)

JUN

NA

0%

13:59:00

GE

Import Prices (MoM)

SEP

NA

-0.6%

14:30:00

US

Durable Goods Orders

JUN

0.1%

2.1%

14:30:00

US

Durable Goods Ex Transportation

JUN

0.4%

0.7%

16:30:00

US

Crude Oil Inventories (WoW chg)

W29

NA

-3727

border=0 Thursday, July 28th

09:55:00

GE

Unemployment Change (Thsd)

JUL

NA

-8

09:55:00

GE

Unemployment Rate

JUL

NA

7%

11:00:00

EC

Euro-zone: Industrial Confidence

JUL

NA

3.2

11:00:00

EC

Business Climate Indicator

JUL

NA

.92

11:00:00

EC

Euro-Zone: Economic Confidence

JUL

NA

105.1

11:00:00

EC

Euro-Zone: Consumer Confidence

JUL

NA

-11.4

border=0 Friday, July 29th

08:45:00

FR

Producer Price Index (MoM)

JUN

NA

-0.5%

14:30:00

US

GDP (QoQ)

1Q

1.8%

1.9%

14:30:00

US

GDP Price (QoQ)

1Q

1.9%

2%

14:30:00

US

Personal Consumption

1Q

NA

2.2%

15:45:00

US

Chicago Purchasing Manager Index

JUL

60.2

61.1

15:55:00

US

U. of Michigan Confidence

JUL

65.6

63.8



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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