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Market Outlook December 20th - December 24th PDF Print E-mail

Market Outlook

- WALL STREET:
US indices rose last week and closed at their highest levels since September 2008 helped by a bunch of better than expected economic releases. Weekly jobless claims declined to 420k (425k expected) from 423k. The Federal Reserve Bank of New York's general economic index jumped to 10.57 in December (5.00 expected) from -11.1 the prior month. Also, industrial production rose 0.4% in November (+0.3% expected) after a downwardly revised 0.2% drop in October. November Housing start rose to 555k (550k expected) from 534k in October. Regarding sectors, households & personal products and commercial added more than 2% whereas, diversified financials declined more than 2%. Technically, the S&P 500 is still challenging its 1250 resistance area which is limiting the short-term upside potential.

- EUROPE:
The FTSE 100 reached its highest level since June 2008. On the economic data front, UK October ILO Unemployment rate (3mths) rose to 7.9% (7.7% expected) from 7.7% in September. However, CBI December Retailing Sales soared to an 8-yrs high at 58 (38 expected) vs 43 in November. November CPI unexpectedly rose 3.3% YoY vs 3.2% in October. From a technical point of view, the index is challenging November highs around the 5900 mark. The failure to break above this level last week is a sign of weakness and should leave the index vulnerable to a technical setback. However, ascending 20 & 50-simple moving averages and the key support threshold @ 5692 should maintain an upward pressure in the forthcoming days. A break above 5900 would open the way to an immediate rise towards 6028. In the rest of Europe, Moodys cut Irelands credit rating by 5 notches to Baa1 with a negative outlook while German December IFO business climate rose to its highest level since 1991 at 109.9 (109 expected) from 109.3. Technology sector advanced the most last week with a 2.22% gain whereas; banks and automobile fell by more than 2%. Technically, the Stoxx 600 is expected to reach 282.5 in the coming days.

 

  December 20th - December 24th

 

border=0 Market Round up

 

Weekly chg (%)

Last

Dow Jones

.7

11491.9

Nasdaq 100

.1

2218.3

Dax Xetra

-.3

6982.5

Cac 40

.3

3867.4

border=0 Foreign Exchange

Euro/dollar : the pair has rebounded on its support but stands below its new resistance as the RSI is turning down. 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 Nike (USD 90.05 ; 2.56% ; NKE ; NKE.N)
On Tuesday, Nike is expected to deliver 2Q EPS of $0.88 compared to $0.76 a year earlier on sales of $4.8bln vs $4.4bln. Earlier, the stock was upgraded to "buy" from "neutral" at UBS and the price target was raised to $95 from $91 at Citigroup (the "buy" rating unchanged). From a technical view, the stock remains well positively oriented, backed by a rising 20D MA, a further bounce is more likely to occur to $93.25 & $95.5 (fibonacci project) in the coming days.

border=0 Carnival (USD 42.51 ; -3.32% ; CCL ; CCL.N)
The same day, Carnival, the owner and operator of cruise ships offering cruises to all major vacation destinations worldwide, may release 4Q EPS of $0.3 compared with $0.24 a year ago on sales of appx. $3.4bln vs $3.2bln. Recently, the price target was raised to $55 from $50 at Goldman Sachs (the "buy" rating unchanged). Technically, the stock failed to surpass the key resistance at $45 and now consolidates above its 50D MA. Above $40.5, a new test of $45 should be in sight before any further upsides.

border=0 Bed Bath & Beyond (USD 47.72 ; 2.05% ; BBBY ; BBBY.O)
On Wednesday, Bed Bath & Beyond Inc, the US operator of a nationwide chain of retail stores, could announce 3Q EPS of $0.66 compared to $0.58 a year ago on sales of $2.1bln vs nearly $2bln. Last week, the Co's price target was raised to $52 from $49 at JPMorgan (the "neutral" rating unchanged). From a chartist view, the stock accelerated on the upside following the upside breakout of $45.5 (a major horizontal level). A new up leg will probably occur to $50 at first, as long as the key level ($45.5) plays as a support role.

border=0 Walgreen (USD 37.58 ; 3.16% ; WAG ; WAG.N)
On the same day in the US, Walgreen is expected to publish 1Q EPS of $0.53 compared to $0.52 a year ago on sales of $17.3bln vs $16.4bln. Earlier, the drugs retailing giant announced it had November sales of $5.83bln, an increase of 8.6% from $5.36bln for the same month in 2009. Duane Reade stores, acquired in April 2010, contributed 2.8 percentage points to the total sales increase for the month. Recently, the Co was upgraded to "buy" from "neutral" at UBS. From a technical view, above $36, the stock should challenge its YTD high at $38 and then to $40 as the next target.

border=0 Micron Technology (USD 8.21 ; -0.48% ; MU ; MU.N)
Wednesday, Micron Technology may report 1Q EPS of $0.29 compared to $0.23 a year ago on sales of appx. $2.4bln vs $1.7bln. Recently, the Co introduced a portfolio of high-capacity flash memory products that will lengthen the life of NAND for years to come. From a technical point of view, the stock remains capped by a MT bearish trend line. The risk is a slide below its 20D MA's support, which should open the way towards $7.15.

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


Corporate Calendar December 20th - December 24th

Date

Market

Company

Event

border=0 Monday, December 20th

 

AS

Immofinanz Immobilien

2nd-Quarter results

 

US

Adobe Systems

4th-Quarter results

 

US

Paychex

2nd-Quarter results

 

US

Darden Restaurants

2nd-Quarter results

 

US

Jabil Circuit

1st-Quarter results

border=0 Tuesday, December 21st

 

US

Nike

2nd-Quarter results

 

US

Red Hat

3rd-Quarter results

 

US

Conagra Foods

2nd-Quarter results

 

US

CarMax

3rd-Quarter results

 

US

Carnival

4th-Quarter results

 

US

Cintas

2nd-Quarter results

border=0 Wednesday, December 22nd

 

US

Bed Bath & Beyond

3rd-Quarter results

 

US

Walgreen

1st-Quarter results

 

US

Micron Technology

1st-Quarter results

border=0 Thursday, December 23rd

   

No major earnings expectd

 

border=0 Friday, December 24th

   

No major earnings expected

 


Economic Calendar (CET) December 20th - December 24th

Date

Market

Economic data

Period

Expected

Last

border=0 Monday, December 20th

08:00:00

GE

Producer Price Index (MoM)

2Q

0.3%

0.4%

10:00:00

EC

Euro-Zone: Current Account (Bln) (MoM)

OCT

NA

-9.2

16:00:00

EC

Euro-Zone: Consumer Confidence

NOV

-8.7

-9.4

border=0 Tuesday, December 21st

10:30:00

UK

Public Sector Net Borrowing (Bln)

NOV

NA

9.8

10:30:00

UK

Public Finances (PSNCR) (Bln)

NOV

NA

2.431

border=0 Wednesday, December 22nd

08:00:00

GE

Import Prices (MoM)

AUG

0.5%

-0.2%

10:30:00

UK

Current Account (Bln)

3Q

NA

-7.383

10:30:00

UK

GDP (QoQ)

3Q

0.8%

0.8%

14:30:00

US

GDP (QoQ)

3Q

2.8%

2.5%

16:00:00

US

Existing Home Sales (Mln)

NOV

4.7

4.43

16:30:00

US

Crude Oil Inventories (WoW chg)

W50

NA

-9854

border=0 Thursday, December 23rd

14:30:00

US

Durable Goods Orders

NOV

-0.4%

-3.4%

14:30:00

US

Personal Income

NOV

0.2%

0.5%

14:30:00

US

Personal Spending

NOV

0.4%

0.4%

14:30:00

US

Initial Jobless Claims (Thsd)

W50

420

420

15:55:00

US

U. of Michigan Confidence

DEC

74.2

74.2

16:00:00

US

New Home Sales (Thsd)

NOV

299.15

283

border=0 Friday, December 24th

   

No major economic event

     


 

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