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Market Outlook - 29th August - 2nd September PDF Print E-mail

Market Outlook

- WALL STREET:
US indices finished higher, snapping a four-week losing streak. On the economic front, Bernanke said that "The Fed has a range of tools that could be used to provide additional monetary stimulus" and announced that the Fed had decided to expand its September meeting to two days - Sept. 20 and 21 - to review the pros and cons of further easing. 2Q GDP rose at a 1.0% annual rate (+1.1% expected). Regarding US stocks, Bank of America announced an agreement to sell preferred stock to Berkshire Hathaway in a private offering, raising $5B. Apple announced the resignation of CEO Steve Jobs and his succession by COO Tim Cook. All sectors ended in positive territory. Consumer durables, diversified financials and commercial and professional services recorded the best performance, gaining over 7%. From a technical view, the S&P500 is expected to post a limited rebound to challenge the key resistance at 1200 before a new pullback towards 1100.

- 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 releases, UK GDP was up 0.2% in the second quarter in final estimation, as expected, vs +0.5% in 1Q. Nationwide consumer confidence index advanced to 49 in July vs 51 in June and 45 expected. In Europe, the CAC 40 and the DAX gained 2.34% and 1.05% respectively, while the SMI added 4.5%. Also, the euro-zone, PMI composite was flat at 51.1 in August (50 expected). Most sectors finished higher last week. Automobiles and parts, industrial goods and services, technology and financial services rose more than 2.5% while banks, insurance and retail closed lower last week. 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 29th - September 2nd

border=0 Market Round up

 

Weekly chg (%)

Last

Dow Jones

4.3

5129.9

Nasdaq 100

6.1

2162

Dax Xetra

1

5537.5

Cac 40

1.8

5129.9

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 Bouygues (EUR 22.21 ; 2.3% ; EN ; BOUY.PA)
On Tuesday, Bouygues is expected to post 1H net income of E376M compared to E532M a year earlier on sales of around E15B vs E14.7B. Earlier, the Co signed a $68M contract to construct a high-voltage power line in northern Gabon. Recently, the Co's price target was cut to E34 from E40 at Exane BNP Paribas (the "outperform" rating unchanged). From a technical view, the stock remains capped by its declining 20D MA, and should post a ST consolidation before further downsides towards 20.

border=0 L'Oréal (EUR 77.36 ; -0.86% ; OR ; OREP.PA)
The same day, L'Oréal may deliver 1H net profit of E1.5B compared to E1.3B a year ago on sales of E10.1B vs appx. E9.7B. Last week, the Co's Executive committee appointed Geoff Skingsley as Managing Director, Africa, Middle East Zone. Early this month, the Co was added to Goldman Sachs' "conviction buy" list. Technically, the stock price holds above its key support at E75.50. Hence, a technical rebound is highly expected to E80 in the forthcoming days before any decisive moves.

border=0 Carrefour (EUR 18.375 ; -0.6% ; CA ; CARR.PA)
On Wednesday, Carrefour, the French retail giant, is expected to unveil 1H net income of E260M compared with E82M a year ago on sales of E40.2B vs E43.3B. Recently, earlier, Wal-Mart Stores was said to be seeking again to acquire the Co's Brazilian unit according to WSJ. Besides, the stock price target was cut to E22 from E25 at Jefferies (the "hold" rating unchanged). Graphically, the share price is still on the downside, but the RSI is posting bullish divergence, calling for a technical rebound in sight.

border=0 Hays (GBp 72.4 ; 2.33% ; HAS ; HAYS.L)
Thursday, Hays Plc, the UK specialist of recruitment and human resource services, could announce FY profit before tax of around £105M, compared with £30M a year ago on revenues of £3.1B vs £2.7B. Early this month, the Co was upgraded to "neutral" from "underweight" at HSBC, and was also raised to "buy" from "neutral" at UBS. From a chartist point of view, the stock remains capped by its bearish 20D MA since early July 2011, and may re-test it before new weaknesses to 65p.

border=0 Campbell Soup (USD 30.92 ; 2.96% ; CPB ; CPB.N)
On Friday, in the US, Campbell Soup, the food producer, may report 4Q adjusted EPS of around $0.38 compared with $0.33 last year on sales of $1.57B vs $1.52B. Earlier, the USDA forecasts 3.5%-4.5% inflation for food-at-home in 2011, triple the 1.3% expected for core inflation. From a technical view, the stock currently consolidates above the $30 support, and should post a limited technical rebound at first before any further decline to $28.5.

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


Corporate Calendar August 29th - September 2nd

Date

Market

Company

Event

border=0 Monday, August 29th

 

GR

EFG Eurobank Ergasias

2nd-Quarter results

 

IT

Exor

1st-Half results

 

IT

Unione di Banche Italiane

1st-Half results

border=0 Tuesday, August 30th

 

FR

Bouygues

1st-Half results

 

FR

L'Oréal

1st-Half results

 

FR

Vinci

1st-Half results

 

SZ

Baloise Holding

1st-Half results

 

UK

Bovis Homes

1st-Half results

 

UK

Bunzl

1st-Half results

border=0 Wednesday, August 31st

 

FR

Bourbon

1st-Half results

 

FR

Carrefour

1st-Half results

 

FR

Lagardère

1st-Half results

 

FR

Vivendi

1st-Half results

 

US

Joy Global

3rd-Quarter results

 

US

SAIC Inc

2nd-Quarter results

border=0 Thursday, September 1st

 

FR

Iliad

1st-Half results

 

FR

Pernod-Ricard

annual results

 

UK

Go-Ahead Group Plc

annual results

 

UK

Hays

annual results

 

US

Brown Forman

1st-Quarter results

 

US

H&R Block

1st-Quarter results

border=0 Friday, September 2nd

 

US

Campbell Soup

4th-Quarter results


Economic Calendar (CET) August 29th - September 2nd

Date

Market

Economic data

Period

Expected

Last

border=0 Monday, August 29th

12:59:00

GE

Consumer Price Index (MoM)

JUL

NA

0.4%

12:59:00

GE

CPI - EU Harmonised (MoM)

JUL

NA

0.5%

13:59:00

GE

Retail Sales (MoM)

APR

NA

4.5%

14:30:00

US

Personal Income

JUL

0.4%

0.1%

14:30:00

US

Personal Spending

JUL

0.4%

-0.2%

border=0 Tuesday, August 30th

10:30:00

UK

Net Consumer Credit (Mln)

JUL

NA

0.4

11:00:00

EC

Euro-zone: Industrial Confidence

AUG

NA

1.1

11:00:00

EC

Business Climate Indicator

AUG

NA

0.45

11:00:00

EC

Euro-Zone: Economic Confidence

AUG

NA

103.2

11:00:00

EC

Euro-Zone: Consumer Confidence

AUG

NA

-16.6

16:00:00

US

Consumer Confidence

AUG

53.23

59.5

border=0 Wednesday, August 31st

09:55:00

GE

Unemployment Change (Thsd)

AUG

NA

-11

09:55:00

GE

Unemployment Rate

AUG

NA

7%

11:00:00

EC

Euro-Zone: Unemployment Rate

JUL

NA

9.9%

15:45:00

US

Chicago Purchasing Manager Index

AUG

53.6

58.8

16:00:00

US

Factory Orders

JUL

1.5%

-0.8%

16:30:00

US

Crude Oil Inventories (WoW chg)

W34

NA

-2213

border=0 Thursday, September 1st

07:30:00

FR

Unemployment Rate

2Q

NA

9.2%

14:30:00

US

Nonfarm Productivity

2Q

-0.5%

-0.3%

16:00:00

US

Construction Spending (MoM)

JUL

0.1%

0.2%

16:00:00

US

ISM - Manufacturing

AUG

48.8

50.9

16:00:00

US

ISM - Price Paid

AUG

NA

59

23:00:00

US

Total Vehicule Sales (Mln)

AUG

11.58

12.2

border=0 Friday, September 2nd

11:00:00

EC

Euro-Zone: PPI (MoM)

JUL

NA

0%

14:30:00

US

Unemployment Rate

AUG

9.1%

9.1%

14:30:00

US

Change in Nonfarm Payrolls (Thsd)

AUG

80.88

117

14:30:00

US

Change in Manufact. Payrolls (Thsd)

AUG

0

24


 


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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