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Market Outlook February 22nd - February 26th PDF Print E-mail

 

Market Outlook

- US : US indices bounced sharply last week in a broad based rally on optimism about the strength of the economic recovery and better than expected economic data. Investors were also reassured that the surprise increase in the discount rate does not signal an imminent increase in the Fed funds. Shares in the Real Estate (+6.62%), Media (+4.95%) and Diversified Financials (+4.34%) sectors gained most. From a technical point of view the rise above 1080 resistance has triggered a bounce that may lead the S&P 500 to its next strong resistance at 1130 while 1150 is key to break to see further medium term gains. Only a break below 1074 would reinstate the short term downside risk.

- EUROPE : European indices rose more than in the US helped by gains in the Basic Resources (+5.91%), Banks (+5.85%) and Industrial Goods & Services (+5.31%) sectors. On the STOXX 600, the index is expected to test a strong resistance area around 254/255 and only a break below 240 would call for a new test to break 233.

February 22nd - February 26th

Market Round up

 

Weekly chg (%)

Last

Dow Jones

2.5

10402.4

Nasdaq 100

2.7

1823.3

Dax Xetra

3.7

5717

Cac 40

4.3

3763.8

Foreign Exchange

Euro/dollar : The pair has rebounded on its support but remains under pressure as the RSI is badly directed. SHORT below 1.4250 towards 1.34 & 1.30.

Dollar/yen : The pair is rebounding on its support and should reach its next resistance, the RSI is turning up. LONG @ 88 with 93.80 or even 97.50 in sight.

Company preview

Home Depot (USD 30.15 ; 4% ; HD ; HD.N)
Home Depot, the world's largest home improvement retailer, is expected to report Tuesday before the market opens, a 4Q EPS of $0.16 vs $0.19 a year ago on sales of $14bln vs $14.6bln a year ago. Last week the stock was upgraded to "outperform" from "market perform" at Oppenheimer & Co. From a technical point of view, the stock jumped last week above a key horizontal resistance at $29.3. The rising 20d and 50d moving averages call for a continuation of the rise to $31 and $33 a major horizontal resistance on a weekly chart.

Accor (EUR 37.125 ; 7.34% ; AC ; ACCP.PA)
On Wednesday, Accor, a Co operating in hotels and tourism as well as in Services to corporate clients and public institutions, could report a FY09 net income of appx. E265m vs E575m a year ago. On January 19/2010, the Co released a trading update saying that FY09 target for operating profit before tax and non-recurring items was confirmed at between E400m and E450m and consolidated revenue for 2009 totaled E7.06bln, down 7.9% like-for-like and 8.5% on a reported basis compared with 2008. Technically, the stock pushed above a ST declining resistance line and regarding technical indicators on a daily basis, the RSI has crossed over its neutrality area at 50. Hence, a new up leg is more likely to occur towards E38 and even to E38.9 in the forthcoming weeks.

Allianz (EUR 82.69 ; 3.91% ; ALV ; ALL.PA)
On Thursday, Allianz, the German insurer, may deliver a FY net income of appx. E4.4bln vs a loss of appx. E2.4bln a year ago, before the market opens. Last week, the Co's price target was raised to E100 from E90 at Société Générale while the "buy" rating was maintained. From a chartist point of view, the stock bounced off from its key support threshold @ E75.5 corresponding to November 2009 low and May 2009 high. Since the 20MA has reversed up, a further bounce is more likely to occur to E86.1 and E89.8 (year to date high) in extension in the forthcoming weeks.

BASF (EUR 42.05 ; 4.59% ; BAS ; BASF.DE)
The same day, BASF, the chemical Co, is expected to unveil a FY net income of appx. E1.7bln vs E2.9bln in the previous year period, before the market opens. Two weeks ago, the head of Co's Asian joint venture BASF-YPC announced that 2010 target of making 10% of its global chemical sales in China was on track to be achieved. Graphically, the stock is supported by the 100D moving average which has triggered upward pressure many times since April 2009. More recently, the upside breakout of E41 is positive signal that has opened the path to E43 and E45 (year to date high).

Newmont Mining (USD 48.54 ; 3.81% ; NEM ; NEM.N)
Newmont Mining, a gold producer, with main assets or operations in the United States, Australia, Peru, Indonesia, Ghana, Canada, New Zealand and Mexico, may report on Thursday 4Q EPS of $0.84 vs $0.26 a year ago helped by higher gold price. The Co's unit Minera Yanacocha (Peru) forecast last week 2010 gold sales of just 1.4-1.5m vs about 2.0m ounces estimated in 2009. Technically, the stock extended its rebound started earlier this month and broke above the upper boundary of a consolidation channel in place since early December 2009. The stock may retest $50 and $54.27 (high of December 4 down gap). Only a break below $44.3 would reinstate the stock in its consolidation channel.

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

Corporate Calendar February 22nd - February 26th

Date

Market

Company

Event

Monday, February 22nd

 

 

UK

Bunzl

annual results

 

UK

Hammerson

annual results

 

NE

TNT

annual results

 

US

Campbell Soup

1st-Quarter results

 

US

Lowe's Cos

2nd-Quarter results

 

US

Constellation Energy Group

1st-Quarter results

Tuesday, February 23rd

 

 

FR

Vallourec

annual results

 

NE

Heineken

annual results

 

US

Target

3rd-Quarter results

 

US

Macy's Inc

4th-Quarter results

 

US

Sears Holdings

1st-Quarter results

 

US

Home Depot

4th-Quarter results

Wednesday, February 24th

 

 

FR

Accor

annual results

 

UK

Logica

annual results

 

SP

Iberdrola

annual results

 

SP

Iberia

annual results

 

US

Limited Brands

4th-Quarter results

 

US

TJX Companies

1st-Quarter result

Thursday, February 25th

 

 

FR

France Telecom

annual results

 

FR

CGG-Veritas

annual results

 

GE

Henkel

annual results

 

GE

Allianz

annual results

 

US

Gap

4th-Quarter results

 

US

HJ Heinz

1st-Quarter results

Friday, February 26th

 

 

GE

Bayer

annual results

 

UK

Lloyds Banking Group

annual results

 

SP

Endesa

annual results

 

SP

Telefonica

annual results

 

SP

Acerinox

annual results

 

US

Berkshire Hathaway

1st-Quarter results


Economic Calendar (CET) February 22nd - February 26th

Date

Market

Economic data

Period

Expected

Last

Monday, February 22nd

   

No major economic data expected

     

Tuesday, February 23rd

16:00:00

US

Consumer Confidence

FEB

55.01

55.9

 Wednesday, February 24th

16:00:00

US

New Home Sales (Thsd)

JAN

355.34

342

16:30:00

US

Crude Oil Inventories (WoW chg)

W7

NA

3085

Thursday, February 25th

14:30:00

US

Durable Goods Orders

JAN

1.7%

1%

14:30:00

US

Durable Goods Ex Transportation

JAN

1.1%

1.4%

14:30:00

US

Initial Jobless Claims (Thsd)

W7

NA

473

Friday, February 26th

14:30:00

US

GDP (QoQ)

4Q

5.3%

5.7%

14:30:00

US

GDP Price (QoQ)

4Q

0.7%

0.6%

14:30:00

US

Personal Consumption

4Q

NA

2%

15:45:00

US

Chicago Purchasing Manager Index

FEB

59.6

61.5

15:55:00

US

U. of Michigan Confidence

FEB

74

73.7

16:00:00

US

Existing Home Sales (Mln)

JAN

5.51

5.45


 

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. Investors are not authorized to copy, reproduce, duplicate, sell, resell or exploit any portion of the Newsletter for their own commercial purposes. In that case, Internaxx will immediately end the subscription.

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