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Market Outlook - 26th - 30th September PDF Print E-mail

Market Outlook

- WALL STREET:
US indices fell sharply last week, as global markets were concerned about the debt crisis in Europe. On the economic front, the US Commerce Department said housing starts dropped 5% to a 571,000 annual rate (590K expected) in August. Looking at companies, Moody's downgraded long-term senior debt grades at Bank of America and Wells Fargo, and also cut Citigroup's short-term credit rating. Also, Hewlett-Packard announced the replacement of President & CEO Leo Apotheker by Meg Whitman. All sectors retreated last week, with materials, diversified financials and energy losing over 11%. From a technical view, the S&P500 index has just broken down its "bearish flag" pattern, which should open the downside way to 1100, and even to 1040 as possible.

- EUROPE:
In the UK, the FTSE 100 lost 5.62% on the week. From a chartist view, as long as 4800 is not broken, the ST outlook for the FTSE 100 is still mixed to bullish with a first target at 5235. From a technical view, the S&P500 index has just broken down its "bearish flag" pattern, which should open the downside way to 1100, and even to 1040 as possible. Looking at economic data, UK Nationwide consumer confidence was 48 in August vs 49 in July. In other European news, the ZEW survey for economic sentiment in Germany was down to -43.3 in September from -37.6 in August. Euro zone PMI composite was 49.2 in September vs 50.7 in August and S&P's downgraded Italy's credit rating to "A" from "A+" with a negative outlook. All European indices and sectors were down last week. The CAC 40, the DAX, the FTSE MIB and the OMX indices retreated over 6% on the week. On sectors, basic resources lost most (-15.2%) followed by automobiles & parts (-10.5%) and insurance (-9.0%). Technically, the Stoxx 600 index fell below its "bearish flag" pattern, and should post new weaknesses towards 195.

 

  September 26th - September 30th

border=0 Market Round up

 

Weekly chg (%)

Last

Dow Jones

-6.4

10771.5

Nasdaq 100

-4.3

2206.9

Dax Xetra

-6.8

5196.6

Cac 40

-7.3

2810.1

border=0 Foreign Exchange

Euro/dollar : the pair has broken below a MT rising trend line calling for further decline. SHORT below 1.4200 with 1.3325 & even 1.2965 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 Close Brothers (GBp 664 ; -2.92% ; CBG ; CBRO.L)
On Tuesday, Close Brothers is expected to deliver FY pre-tax profit of appx. £123M compared with £99M a year earlier. Last week, the Co reached an agreement to sell its entire 49.9% interest in Mako Global Derivatives Executive LLP to the Mako directors and staff. From a technical view, the stock remains capped by a declining 50D MA, and is now testing the 650p support. The risk is a slide below 650p, which should call for a new pullback towards 600p.

border=0 Accenture (USD 50.41 ; -8.38% ; ACN ; ACN.N)
The same day in the US, Accenture, a management and technology consulting services company, may announce 4Q EPS of around $0.9 compared with $0.66 a year ago on sales of $6.5B vs $5.8B. Recently, the Co was awarded a 10yr technology consulting and outsourcing contract by the Thomas Cook Group. Earlier, the Co signed a E12M IT application services agreement with the European Parliament. Technically, the stock price is challenging its key support at $50. As long as $53.5 holds on the upside, the risk of the break down $50 remains high.

border=0 Smiths Group (GBp 912 ; -7.03% ; SMIN ; SMIN.L)
On Wednesday, Smiths Group, a global technology company, is expected to release FY pre-tax profit of £456M compared with £373M last year on revenues of £2.85B vs £2.8B. Recently, the Co was removed from Citigroup's "Least Preferred" stock list. Early this month, the Co's unit, Smiths Interconnect acquired Power Holdings Inc. for $235M. From a chartist view, the share price remains within its ST range between 1000 and 900, and may re-test the lower boundary in sight.

border=0 Hennes & Mauritz (SEK 189.3 ; -4.68% ; HMB ; HMb.ST)
Thursday, Hennes & Mauritz, European retail giant, could post 3Q adjusted net income of SK3.4B compared to SK4.2B a year earlier on revenues of SK26.8B, almost in line YoY. A week ago, the Co was upgraded to "neutral" from "sell" at UBS. Earlier, H&M group reported August 2011 total sales including VAT up by 8% YoY, in local currencies. From a technical point of view, the stock price is still under pressure below its major resistance at SK200. As long as this threshold is not surpassed, the outlook remains bearish with targets at SK180 and SK174.5.

border=0 Tate & Lyle (GBp 597.5 ; -2.29% ; TATE ; TATE.L)
On the same day in the UK, Tate & Lyle may release 1H pre-tax profit of £164.5M compared to £104M last year on revenues of around £1.5B vs £1.35B. Earlier, Moody's affirmed the Co's issuer and senior unsecured LT Baa3 and ST term Prime-3 ratings. The rating company also changed the Co's outlook on all ratings to positive from stable. Graphically, the stock is still trading within a ST bullish channel, but is also close to the lower boundary, calling for caution. Nevertheless, above 570p, look for 650p at first.

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


Corporate Calendar September 26th - September 30th

Date

Market

Company

Event

border=0 Monday, September 26th

 

AS

Immofinanz Immobilien

1st-Quarter results

 

SZ

Aryzta AG

annual results

border=0 Tuesday, September 27th

 

FR

Neopost

1st-Half results

 

UK

Close Brothers

annual results

 

US

Accenture

4th-Quarter results

 

US

Jabil Circuit

4th-Quarter results

 

US

Paychex

1st-Quarter results

 

US

Walgreen

4th-Quarter results

border=0 Wednesday, September 28th

 

UK

DS Smith

annual results

 

UK

Smiths Group

annual results

 

US

Darden Restaurants

1st-Quarter results

 

US

Family Dollar Stores

4th-Quarter results

 

US

McCormick

3rd-Quarter results

 

US

Micron Technology

4th-Quarter results

border=0 Thursday, September 29th

 

SW

Hennes & Mauritz

3rd-Quarter results

 

UK

Tate & Lyle

1st-Half results

border=0 Friday, September 30th

   

No major earnings expected

 


Economic Calendar (CET) September 26th - September 30th

Date

Market

Economic data

Period

Expected

Last

border=0 Monday, September 26th

10:00:00

GE

IFO - Business Climate

SEP

NA

108.7

10:00:00

GE

IFO - Current Assessment

SEP

NA

118.1

10:00:00

GE

IFO - Expectations

SEP

NA

100.1

13:59:00

GE

Retail Sales (MoM)

APR

NA

0.3%

16:00:00

US

New Home Sales (Thsd)

AUG

293.35

298

border=0 Tuesday, September 27th

10:00:00

EC

Euro-zone: M3 (3 mth ave.)

AUG

NA

2.1%

13:59:00

GE

Import Prices (MoM)

SEP

NA

0.8%

16:00:00

US

Consumer Confidence

SEP

46.49

44.5

border=0 Wednesday, September 28th

07:30:00

FR

GDP (QoQ)

3Q

NA

0%

12:59:00

GE

Consumer Price Index (MoM)

AUG

NA

0%

12:59:00

GE

CPI - EU Harmonised (MoM)

AUG

NA

0%

14:30:00

US

Durable Goods Orders

AUG

-0.5%

4.1%

14:30:00

US

Durable Goods Ex Transportation

AUG

0.3%

0.8%

16:30:00

US

Crude Oil Inventories (WoW chg)

W38

NA

-7336

border=0 Thursday, September 29th

09:55:00

GE

Unemployment Change (Thsd)

SEP

NA

-8

09:55:00

GE

Unemployment Rate

SEP

NA

7%

11:00:00

EC

Euro-zone: Industrial Confidence

SEP

NA

-2.9

11:00:00

EC

Business Climate Indicator

SEP

NA

0.07

11:00:00

EC

Euro-Zone: Economic Confidence

SEP

NA

98.3

14:30:00

US

GDP (QoQ)

2Q

1.2%

1%

border=0 Friday, September 30th

08:45:00

FR

Producer Price Index (MoM)

JUL

NA

-0.1%

11:00:00

EC

Euro-Zone: Unemployment Rate

AUG

NA

10%

14:30:00

US

Personal Income

AUG

0.1%

0.3%

14:30:00

US

Personal Spending

AUG

0.2%

0.8%

15:45:00

US

Chicago Purchasing Manager Index

SEP

56.6

56.5

15:55:00

US

U. of Michigan Confidence

SEP

58

57.8


 


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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