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Market Outlook - 9th - 13th Jan PDF Print E-mail

Market Outlook

- WALL STREET:
US indices closed higher last week. On the economic data front, non farm payrolls rose 200K (+155K exp.) in December while the unemployment rate fell to 8.5% from an upwardly revised 8.7% in November. Looking at corporate news, Alcoa said it will reduce global smelting capacity by 12%. Yahoo! appointed Scott Thompson as CEO, effective January 9, 2012, at which time Tim Morse will resume his role as CFO. Also, the Federal Reserve will start providing target for Federal Funds rate at January meeting according to FOMC minutes. Shares in most sectors gained ground last week. Automobiles (+7.32%), diversified financials (+4.5%) and banks (+3.77%) rose most, while telecommunications and utilities lost more than 2.5%. From a technical perspective, the S&P500 index is still on the upside above its 20D & 50D MAs, and will probably challenge its next resistance at 1290 before further advance to 1320.

- EUROPE:
Last week, the FTSE 100 index rose 1.49%. Technically, the index broke above its bearish trend line, and should challenge 5735 in sight, if breakout, look for a new bounce to 5955. Looking at economic news, Euro-Zone retail sales fell 0.8% MoM (-0.4% exp.) in November and euro-zone PMI composite was 48.3 in December in final estimation vs 47.9 in prior estimation. In Germany, factory orders fell by 4.8% in November (-1.8% exp.), the biggest monthly drop since January 2009, vs +5% in November. In Europe, the DAX and the SMI closed higher, while the CAC40, the IBEX35 and the FTSE MIB declined. Most sectors extended their gains from last week, with automobiles, basic resources, and oil & gas leading the rally. Graphically, the Stoxx600 index is testing its 251 resistance, and the upside breakout of this threshold would trigger a new up move to 262.

 

  January 9th - January 13th

border=0 Market Round up

 

Weekly chg (%)

Last

Dow Jones

.6

12359.9

Nasdaq 100

3.1

2356.2

Dax Xetra

2.7

6057.9

Cac 40

-.7

3137.4

border=0 Foreign Exchange

Euro/dollar : the pair remains on the downside and is approaching its previous low as the RSI is badly directed. SHORT position below 1.3875 with 1.26 & 1.24 in sight.

Dollar/yen : the pair stands below its resistance and remains under pressure. SHORT position below 79.5 with 75.5 & 73.75 in sight.

Company preview

border=0 Chevron (USD 108.31 ; 0.78% ; CVX ; CVX.N)
Wednesday, Chevron could report 4Q EPS of $3.27, up from $3.67 in 4Q10. Last week, the US oil company lost its bid to challenge a $18B judgement before an Ecuadorian appeals court in a case alleging the Co is responsible for chemical pollution caused by Texaco, which Chevron acquired in 2001, in the Amazon River basin between 1964 and 1992. Graphically, the stock remains supported by its 50-day simple moving average. As long as $105.5 holds on the downsides, expect further upsides towards $115 after a ST consolidation.

border=0 Lennar Corp (USD 20.4 ; 2.72% ; LEN ; LEN.N)
The same day, Lennar Corp may post 4Q EPS of $0.16, vs $0.17 a year earlier. In December, the US second-largest homebuilder said it expanded its homebuilding operations to Seattle and Portland, through the acquisition of appx. 650 finished homesites in 20 communities. From a technical point of view, the stock is well positively oriented, and is also supported by a MT rising trend line since October 2011. Next up targets are set at $21.55 and $22.85, as long as $19.1 is not broken.

border=0 Supervalu (USD 8.23 ; 2.36% ; SVU ; SVU.N)
Also on Wednesday, Supervalu may report 3Q EPS of $0.24 compared to a LPS of $0.95 in 3Q10, on sales of $8.43B vs $8.67B. In November, the retailer and wholesale distributor, announced the opening of a new 330,000 square-foot food distribution center in Lexington, North Carolina. Technically, the stock is challenging its MT major resistance at $8.5. Only the upside breakout of this level should open the way to $9.1 at first.

border=0 Suedzucker (EUR 24.35 ; -1.22% ; SZU ; SZUG.DE)
Thursday, Suedzucker will release its 3Q full earnings report. The Co could unveil 3Q EPS of E0.60, vs E0.33 in the same prior year period, on sales of E1.85B, vs E1.6B. Last month, the largest European sugar producer already reported 9-mth group revenues of E5.24B, up 12% on the year. From a technical perspective, the ST outlook remains bullish on the stock, as both the 20D & 50D MAs play as supports, which should also limit the downside room, and call for a new rebound towards E26.

border=0 JPMorgan Chase (USD 35.36 ; 5.8% ; JPM ; JPM.N)
On Friday, JPMorgan Chase, the US banking corporation, is expected to post 4Q EPS of $0.93, down from $1.12 a year earlier. Last month, the US international accounting rule market agreed on new loan losses recording standards, according to the WSJ, which may shift to an expected-loss model from an incurred-loss model. From a chartist standpoint, the stock posted a bullish gap last week, and also broke above the $34 threshold. Hence, a new upleg is more likely to challenge $37.65 in the forthcoming days.

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


Corporate Calendar January 9th - January 13th

Date

Market

Company

Event

border=0 Monday, January 9th

 

UK

Polar Capital Technology Trust

1st-Half results

 

US

Alcoa

4th-Quarter results

border=0 Tuesday, January 10th

   

No major earnings expected

 

border=0 Wednesday, January 11th

 

DE

Christian Hansen

1st-Quarter results

 

US

Chevron

4th-Quarter results

 

US

Lennar Corp

4th-Quarter results

 

US

Supervalu

3rd-Quarter results

border=0 Thursday, January 12th

 

GE

Suedzucker

3rd-Quarter results

border=0 Friday, January 13th

 

US

JPMorgan Chase

4th-Quarter results

 

US

M&T Bank

4th-Quarter results


Economic Calendar (CET) January 9th - January 13th

Date

Market

Economic data

Period

Expected

Last

border=0 Monday, January 9th

08:00:00

GE

Trade Balance (Bln)

NOV

NA

11.6

08:00:00

GE

Imports (MoM)

NOV

NA

-0.7%

08:00:00

GE

Exports (MoM)

NOV

NA

-3.5%

08:45:00

FR

Trade Balance (Mln)

NOV

NA

-6248

12:00:00

GE

Industrial Production (MoM)

NOV

NA

0.8%

21:00:00

US

Consumer Credit (Bln)

NOV

8.046

7.646

border=0 Tuesday, January 10th

16:00:00

US

Wholesale Inventories

NOV

0.5%

1.6%

border=0 Wednesday, January 11th

10:30:00

UK

Trade Balance Non EU25 (Mln GBP)

NOV

NA

-4554

10:30:00

UK

Visible Trade Balance (Mln GBP)

NOV

NA

-7557

border=0 Thursday, January 12th

10:30:00

UK

Industrial Production (MoM)

NOV

NA

-0.7%

13:00:00

UK

BoE: Rates decision

 

0.5%

0.5%

13:45:00

EC

ECB: Rates decision

 

1%

1%

14:30:00

US

Retail Sales

DEC

0.2%

0.2%

16:00:00

UK

GDP Estimate (NIESR)

DEC

NA

0.3%

16:00:00

US

Business Inventories

NOV

0.4%

0.8%

border=0 Friday, January 13th

10:30:00

UK

PPI - Input (MoM)

DEC

NA

0.1%

10:30:00

UK

PPI - Output (MoM)

DEC

NA

0.2%

11:00:00

EC

Euro-Zone: Trade Balance (Bln)

NOV

NA

1081

11:00:00

EC

Euro-Zone: Trade Balance (Bln) (MoM)

NOV

NA

1081

14:30:00

US

Trade Balance (Bln)

NOV

-44.9

-43.5

15:55:00

US

U. of Michigan Confidence

DEC

70.2

69.9


 


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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