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Market Outlook December 13th - December 17th PDF Print E-mail

Market Outlook

- WALL STREET:
S&P & Nasdaq 100 rose the most last week, adding more than 1% and reached their best level of the year while the Dow Jones ended just 41 points off its year high as results of Co like McDonald's, 3M & Texas Instrument fell short of analyst expectations. The economic data front helped the market to push higher as weekly jobless claims fell by 17k to 421k (425K expected) and wholesale inventories jumped 1.9% in October (+0.8% expected) from an upwardly revised 2.1% increase (1.5% initially published). In addition, Michigan preliminary index of consumer sentiment rose to 74.2 in December (72.5 expected) from 71.6 the prior month. Regarding sectors, banks and diversified financials soared 5.5% and 4.70% respectively whereas; real estate fell by more than 1%. Technically, a flat consolidation remains expected on the S&P 500.

- EUROPE:
The FTSE 100 last week performance stands in the middle of the European range. The BoE maintained its £200bln asset purchase program and left its main rate unchanged at 0.5%. November PPI rose 3.9% YoY vs 4% in October. October industrial production rose 3.3% YoY (3.9% expected) vs 3.8% in September whereas manufacturing production soared 5.8% (5.4% expected) vs 4.9% the month before. December CBI Total Order Book (an index of factory orders) rose to its highest level since July 2008 at -3 (-13 expected) from -15 in November. From a technical point of view, the FTSE 100 is currently challenging the 5850 key resistance area: an upside breakout of it, would open the way towards 6038. In the rest of Europe, AEX & Euro Stoxx 50 gained more than 2% whereas, the OMX ended into negative territory. Ireland was downgraded to BBB+ by Fitch while German November industrial production (sa) bounced 2.9% (1% expected) vs -1% in September. Insurance and oil & gas sectors jumped more than 4% whereas; automobile & retails were the only sectors ending into negative territory. Technically, the Stoxx 600 is expected to reach 282.5 in the coming days.

December 13th - December 17th

Market Round up

 

Weekly chg (%)

Last

Dow Jones

.2

11410.3

Nasdaq 100

1.1

2215.3

Dax Xetra

.8

7006.2

Cac 40

2.8

3857.4

Foreign Exchange

Euro/dollar : the pair has struck against its new intermediary resistance and should face a weakness as the RSI is badly directed. SHORT below 1.38 towards 1.29 & 1.26.

Dollar/yen : the pair is rebounding on its new support and should post a further up move. LONG @ 80.70 with 86 or even 88 in sight.

 

Company preview

border=0 Best Buy (USD 41.8 ; -2.4% ; BBY ; BBY.N)
On Tuesday, Best Buy Co, the US retailing giant is expected to release 3Q EPS of $0.6 compared to $0.53 a year earlier on sales of around $12.5bln vs $12bln. Early this month, the Co announced the exclusive North American launch of the new Nexus S smart phone, co-developed by Google and Samsung. From a technical view, the price broke below its key support at $42.6 last week, which should open the downside way to $40 and $38.5 in extension.

Inditex (EUR 62.91 ; -1.16% ; ITX ; ITX.MC)
Wednesday, Inditex could report 3Q net income of E545.5m compared with E456m a year ago on revenues of around E3.3bln vs E2.9bln. Recently, the Co planned to open 245 new stores in the 2H. Earlier, the stock was downgraded to "neutral" from "buy" at Bank of America. From a chartist view, the shares remain well supported above E60 (a key horizontal level). A test of E65 should be in sight before further upsides to E68.5 (fibonacci project) in the coming days.

Oracle (USD 29.945 ; 3.94% ; ORCL ; ORCL.O)
On Thursday, Oracle may announce 2Q EPS of $0.46 compared to $0.31 a year ago on sales of $8.3bln vs around $5.9bln. Earlier, the Co and Platinum Equity could be in talks to buy Comverse Technology at the price between $9.5 to $10 a share. The Co's price target was raised to $33 from $32 at Goldman Sachs (the "buy" rating unchanged). Technically, the Co surged last week with strong upside momentum. Therefore, A further bounce is more likely to $31.8 & $32.5 after a ST consolidation.

Fedex Corp (USD 93.98 ; -1.07% ; FDX ; FDX.N)
The same day, Fedex Corp is expected to release 2Q EPS of $1.32 vs $1.10 a year earlier on sales of appx. $9.8bln vs $8.6bln. Recently, the Co would increase shipping rates for FedEx Ground and FedEx Home Delivery by a net average of 4.9% effective January 3, 2011. The stock price target was raised to $111 ("outperform") from $98 ("neutral") at Credit Suisse. Graphically, the stock stands above its rising 20D & 50D MAs but is close to its resistance level at $95. If breakout of this threshold, further upsides will probably occur towards $100.

Carnival (GBp 2757 ; 2.15% ; CCL ; CCL.L)
On Friday, Carnival may unveil FY pre-tax profit of appx. $2bln compared with $1.8bln a year ago on revenues of around $14bln vs $13.1bln. Earlier, the Co announced a quarterly cash dividend of $0.10 per share, payable on December 10, 2010. From a technical point of view, the stock is very close to its major resistance at 2800p and should test it in sight before any further rebounds to 2930p at first.

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


Corporate Calendar December 13th - December 17th

Date

Market

Company

Event

Monday, December 13th

   

No major earnings expected

 

Tuesday, December 14th

 

GE

Aurubis

annual results

 

US

Best Buy

3rd-Quarter results

Wednesday, December 15th

 

SP

Inditex

3rd-Quarter results

Thursday, December 16th

 

DE

Danisco

2nd-Quarter results

 

US

Discover Financial Services

4th-Quarter results

 

US

Oracle

2nd-Quarter results

 

US

General Mills

2nd-Quarter results

 

US

Fedex Corp

2nd-Quarter results

Friday, December 17th

 

UK

Carnival

annual results

 

US

Carnival

4th-Quarter results

Economic Calendar (CET) December 13th - December 17th

Date

Market

Economic data

Period

Expected

Last

Monday, December 13th

08:45:00

FR

Current Account (Mln)

OCT

NA

-4.4

08:45:00

FR

Wages (QoQ)

4Q

NA

0.3%

10:30:00

UK

PPI - Input (MoM)

NOV

0.6%

2.1%

border=0 Tuesday, December 14th

11:00:00

GE

Zew Survey (Econ. Sentiment)

DEC

3.7

1.8

11:00:00

GE

Zew Survey (Current Situation)

DEC

83.6

81.5

14:30:00

US

Producer Price Index (MoM)

NOV

0.6%

0.4%

14:30:00

US

Retail Sales

NOV

0.6%

1.2%

16:00:00

US

Business Inventories

OCT

0.8%

0.9%

20:15:00

US

Fed: Rates decision

 

0.25%

0.25%

border=0 Wednesday, December 15th

10:30:00

UK

Unemployment Rate (ILO)

OCT

7.68%

7.7%

14:30:00

US

Empire Manufacturing

DEC

2.5

-11.1

14:30:00

US

Consumer Price Index (MoM)

NOV

0.2%

0.2%

15:15:00

US

Industrial Production (MoM)

NOV

0.3%

0%

16:00:00

US

NAHB Housing Market

DEC

16

16

16:30:00

US

Crude Oil Inventories (WoW chg)

W49

NA

-3819

Thursday, December 16th

10:30:00

UK

Retail Sales (MoM)

NOV

0.4%

0.3%

11:00:00

EC

Euro-Zone: CPI (MoM)

NOV

0.1%

0.4%

14:30:00

US

Housing Starts (Thsd)

NOV

553

519

14:30:00

US

Bulding Permits (Thsd)

NOV

558

552

14:30:00

US

Initial Jobless Claims (Thsd)

W49

423

421

16:00:00

US

Philadelphia Fed.

DEC

14

22.5

Friday, December 17th

08:45:00

FR

Business Confidence Indicator

DEC

101

-0.3%

10:00:00

GE

IFO - Business Climate

SEP

108.7

2.1%

10:00:00

GE

IFO - Current Assessment

DEC

112.2

0.6%

10:00:00

GE

IFO - Expectations

DEC

106.6

-44

11:00:00

EC

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

OCT

NA

71.6

16:00:00

US

Leading Indicators

NOV

1%

-140.4

INTERNAXX

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