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Market Outlook January 10th - January 14th PDF Print E-mail

Market Outlook

- WALL STREET:
US indices rose for their first trading week of the year. On the employment front, the private-sector hired 297k additional workers in December after a revised 93k increase in November; that's the highest level since the survey started in 2001. In addition, nonfarm payrolls rose by 103k in December (150K expected) from an upwardly revised 71k increase in November. The unemployment rate fell to 9.4% in December (9.7% expected) from 9.8%. Regarding this report, Ben Bernanke said : "If we continue at this pace, we're not going to see sustained declines in the unemployment rate." and added: "it could take four to five more years for the job market to normalize fully." Regarding sectors, automobile jumped by 7.71% and technology hardware added 4% whereas, consumer durables, food, beverages & tobacco, and retailing declined by more than 1.5%. From a technical point of view, the S&P is supported by its ascending 50D MA and is expected to reach 1304 in the coming days.

- EUROPE:
In the UK, the FTSE 100 rose moderately after bouncing off its 5900 previous top area and its 20D MA. Economic releases were mixed as the December manufacturing PMI rose to 58.3 (57.2 expected) from 57.5 (revised lower from 58) and Mortgage approval rose to 48k (46.5k expected) from 47.3k. However, PMI construction declined to 49.1 (51 expected) vs 51.8 and service PMI unexpectedly reached its lowest level since March 2009 at 49.7 (52.8 expected) from 53 in November. Technically, the FTSE 100 configuration is calling for caution as the daily RSI is posting a bearish divergence (not confirmed yet). Nevertheless, as long as 5900 is support, a rise towards 6100 and 6222 is expected. In the rest of Europe, the Euro Stoxx 50 jumped 2.19% whereas the Ibex ended down 3%. Automobile, travel & leisure and oil & gas sectors gained the most, whereas, construction materials and chemicals ended into negative territory. Technically, the Stoxx 600 long-term rising trend line currently at 269.2 maintains a bullish bias.

January 10th - January 14th

Market Round up

 

Weekly chg (%)

Last

Dow Jones

.8

11674.8

Nasdaq 100

2.7

2276.7

Dax Xetra

.5

6947.8

Cac 40

1.6

3865.6

Foreign Exchange

Euro/dollar : the pair has struck against its intermediary resistance and is shaping a triangle (continuation pattern). SHORT below 1.38 towards 1.29 & 1.26.

Dollar/yen : the pair is posting a rebound on its support as the RSI is well directed. LONG @ 80.70 with 84.5 or even 86 in sight.

Company preview

 Alcoa border=0(USD 16.42 ; 6.69% ; AA ; AA.N)
Alcoa, the aluminum giant, reports 4Q 2010 results on Monday. The Co is expected to post adjusted EPS of $0.19 vs a loss of $0.22 a year ago. Sales are seen at $5.71bln vs $5.43bln the year earlier. Last friday, Alcoa announced Alcoa plans to restart idled potlines at three aluminum smelters in the United States, creating approximately 260 new jobs through recall and hiring. Technically, The stock trades in a long-term ascending channel since mid-August. Moving averages still support the stock. Further upside is expected with $17.25 and $18 as next targets.

Marks & Spencer (GBp 388.4 ; 4.07% ; MKS ; MKS.L)
Marks & Spencer release on Tuesday its 3Q trading statement. On January 4, Sir Stuart Rose has officialy stepped down as Chairman of the retailer, after six years as the head of the Co, giving the chairmanship to former investment banker Robert Swannell. Sales at UK retailers have been hurt by cold weather and snow falls at the end of the year. From a graphic point of view, the stock strongly bounced on January 5, escaping from a bearish channel, and now trades above its 100 and 50-days moving average (still below the 20-day one). Further bounce is expected with 405 pence and 418 pence as next targets.

Sainsbury (GBp 391.5 ; 3% ; SBRY ; SBRY.L)
Sainsbury unveils on Wednesday its 3Q trading statement. Last friday, research company Nielsen said UK supermarkets sales rose 6.9% in December YoY. Still according to Nielsen, Sainsbury market share in 12 weeks to December 25 2010 were 15.4% vs 14.9% a year earlier. Technically, the stock trades into an ascending channel since December 7 and is now close from its 2010 high at 397 pence. A push above that level will lead the stock to 410 pence.

Suedzucker (EUR 19.84 ; -0.43% ; SZU ; SZUG.DE)
On Thursday, Suedzucker, the german sweeteners maker, posts 3Q results. Adjusted EPS is expected to be E0.35 vs E0.3 a year earlier. Sales are seen at E1.59bln vs E1.5bln a year ago. Last december, the Co increased its FY targets, predicting sales of E6bln vs a previous guidance of E5.8bln and operating profit of E500m. Technically, after a strong rise and reaching a 2010 high at E20.39, the stock is consolidating. Technicals indicators are still in positive territory and argue for a new bullish acceleration towards E20.4 and E20.8.

JP Morgan Chase (USD 43.64 ; 2.88% ; JPM ; JPM.N)
JPMorgan Chase reports its 4Q 2010 results on Friday. The banking group is expected to post adjusted EPS of $0.99 vs $0.75 a year earlier on sales of $24.29bln vs $26.40 a year ago. Last December, the bank annouced it bought former Lehman Brothers' offices in London for $769m. The offices will be JPMorgan's investment bank's European headquarters. Technically, the stock trades in a mid-term ascending channel since mid-November. Moving averages still support the stock. Further upside is expected with 2010 high at $48.20 as main target.

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


Corporate Calendar January 10th - January 14th

Date

Market

Company

Event

Monday, January 10th

 

US

Alcoa

4th-Quarter results

 

US

Apollo Group

1st-Quarter results

Tuesday, January 11th

 

US

Lennar Corp

4th-Quarter results

 

US

Supervalu

3rd-Quarter results

Wednesday, January 12th

   

No major earnings expected

 

Thursday, January 13th

 

GE

Suedzucker

3rd-Quarter results

 

US

Intel

4th-Quarter results

Friday, January 14th

 

US

JP Morgan Chase

4th-Quarter results


Economic Calendar (CET) January 10th - January 14th

Date

Market

Economic data

Period

Expected

Last

Monday, January 10th

   

No major economic event expected

     

Tuesday, January 11th

 

GE

Wholesale Price Index (MoM)

DEC

 

0.7%

16:00:00

US

Wholesale Inventories

NOV

1%

1.9%

Wednesday, January 12th

08:45:00

FR

Current Account (Mln)

SEP

NA

-2.5

10:30:00

UK

Trade Balance Non EU25 (Mln GBP)

NOV

-4806.25

-5004

10:30:00

UK

Visible Trade Balance (Mln GBP)

NOV

-8336.19

-8529

11:00:00

EC

Euro-Zone: Industrial Production (MoM)

NOV

0.6%

0.6%

16:30:00

US

Crude Oil Inventories (WoW chg)

W53

NA

-4161

20:00:00

US

Monthly Budget Satement (Bln)

DEC

NA

-150.4

Thursday, January 13th

 

UK

GDP Estimate (NIESR)

DEC

NA

0.6%

13:00:00

UK

BoE: Rates decision

 

0.5%

0.5%

13:45:00

EC

ECB: Rates decision

 

1%

1%

14:30:00

US

Initial Jobless Claims (Thsd)

W53

NA

409

14:30:00

US

Producer Price Index (MoM)

DEC

0.8%

0.8%

14:30:00

US

Trade Balance (Bln)

NOV

-40.5

-38.7

Friday, January 14th

10:30:00

UK

PPI - Input (MoM)

DEC

1.4%

0.9%

14:30:00

US

Consumer Price Index (MoM)

DEC

0.4%

0.1%

14:30:00

US

Retail Sales

DEC

0.8%

0.8%

14:30:00

US

CPI - Ex Food & Energy (MoM)

DEC

0.1%

0.1%

15:15:00

US

Industrial Production (MoM)

DEC

0.5%

0.4%

15:55:00

US

U. of Michigan Confidence

DEC

75.2

74.5

INTERNAXX

This document does not constitute financial advice. If you require such advice, you should seek appropriate professional advice.
 

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