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Market Outlook January 17th - January 21st PDF Print E-mail

Market Outlook

- WALL STREET:
US indices rose last week as the 4Q earnings season kicked off with Alcoa (AA) announcing its 4Q EPS at $0.21 ($0.19 expected) vs a LPS of $0.22 a year ago. On the economic data front, the Fed Beige Book said "labor markets in most districts appear to be firming somewhat" and US economy grew "moderately" through December. However, the January University of Michigan/Reuters preliminary index of consumer sentiment dropped to 72.7 (75.5 expected) from 74.5 in December and initial jobless claims rose by 35k to 445k (410K expected) whereas, advance retail sales rose 0.6% (+0.8% expected) in December while industrial production gained 0.8% (+0.5% expected). Regarding sectors, semiconductors and diversified financials added more than 4% whereas, telecom, pharmacy and media ended into negative territory. Technically, the S&P 500 remains on the upside and is expected to reach 1304 and 1350 in the coming days.

 

- EUROPE:
In the UK, the FTSE 100 lagged behind all other European indices with its 0.3% weekly gain. The BoE maintained its £200bln asset purchase program while December PPI output nsa rose 0.5% MoM (0.4% expected) vs an upwardly revised 0.4% for the previous month. November industrial production rose 0.4% MoM (+0.5% expected) vs -0.1% in October while Manufacturing production increased by 0.6% (0.4% expected) vs 0.7% in October. November trade balance deficit rose to £4.12bln (£3.8bln expected) from a deficit of £4.04bln in October. Technically, the 5890 former resistance area is now acting as a support and is expected to favour another test of the 6091 resistance ahead of a rise towards 6350. In the rest of Europe, the Ibex soared 8.62% and the FTSE MIB added 4.5% as stocks in banks sector jumped more than 6%. On the opposite, food & beverage, personal & household goods, health care, retail and travel & leisure declined by more than 1%. From a technical point of view, the Stoxx 600 remains on the upside with next targets set at 290 and 293.5.

 

  January 17th - January 21st

Market Round up

 

Weekly chg (%)

Last

Dow Jones

1

11787.4

Nasdaq 100

2.1

2323.4

Dax Xetra

1.8

7075.7

Cac 40

3

3983.3

Foreign Exchange

Euro/dollar : the pair has validated a triangle (continuation pattern) and should face a further weakness. SHORT below 1.35 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

Apple (USD 348.48 ; 3.68% ; AAPL ; AAPL.O)
On Tuesday, Apple is expected to release 1Q EPS of $5.4 compared to $3.67 a year earlier on sales of $24.4bln vs $15.7bln. Recently, the Co could launch sales of the IPad 2 early this April, according to MacNotes' report. From a technical point of view, the stock remains well positively oriented, backed by a bullish trend line. The rising 20D & 50D MAs also maintain the bullish bias on both ST & MT views. Above $330, look for a new bounce to $365 in the forthcoming days.

IBM (USD 150 ; 1.4% ; IBM ; IBM.N)
The same day, IBM reports its 4Q results. Adjusted EPS is expected to be around $4.1 compared to $3.6 on sales of $28.2bln vs $27.2bln. Last week, the Co and Samsung agreed to expand their partnership to jointly develop new semiconductor process technology through the Semiconductor Research Alliance. From a chartist view, the stock has formed a solid support base around $145-$147 and is now challenging its ST resistance at $150. Hence, further upsides are more likely to $157 and $165 after a ST consolidation.

Goldman Sachs (USD 175 ; 2.53% ; GS ; GS.N)
On Wednesday, Goldman Sachs, the US global investment banking and securities firm, could deliver 4Q EPS of around $3.8 compared with $8.2 a year ago. Earlier, the stock was downgraded to "neutral" from "overweight" at JPMorgan. Last Friday, JPMorgan posted 4Q net income of $4.8bln (+47% YoY) or $1.12 per share compared $0.74 for the 4Q of 2009 and a consensus of appx. $1.0. Technically, the stock is heading on the upside above an ascending trend line. As long as $166 is not broken down, the stock price is expected to challenge $180 at first and then to $186.

border=0 Google (USD 624.18 ; 1.26% ; GOOG ; GOOG.O)
Thursday, Google, the US IT giant, could unveil 4Q EPS of appx. $8 compared to $6.1 a year ago on sales of $6bln vs $6.7bln. Recently, the Co acquired eBook Technologies Inc at undisclosed price to deliver richer reading experiences on tablets, electronic readers and other portable devices. Graphically, the stock price is now very close to its key resistance level at $630 and a test should be in sight. The upside breakout of this threshold will probably call for further advance towards $675.

border=0 General Electric (USD 18.8175 ; 2.1% ; GE ; GE.N)
On Friday, General Electric, a diversified technology, media and financial services company, may post 4Q EPS of $0.31, in line with last year on sales of around $40bln vs $41.3bln. Last week, the Co announced the terms of a recommended cash offer by its unit, GE Austria to acquire Wellstream Holdings. Besides, the Co could also consider purchasing Lineage Power Holdings in a deal worth $520m, according LA Times' report. Technically, the stock is bullish above its rising 20D MA and should test its resistance at $19.50 in sight before any further upsides towards $20.5.

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

Corporate Calendar January 17th - January 21st

Date

Market

Company

Even

Monday, January 17th

 

SZ

SGS

annual result

Tuesday, January 18th

 

UK

Chemring Group

annual results

 

US

Apple

1st-Quarter results

 

US

Citigroup

4th-Quarter results

 

US

Fastenal

4th-Quarter results

 

US

IBM

4th-Quarter results

 

US

Linear Technology

2nd-Quarter results

Wednesday, January 19th

 

NE

ASML Holding

annual results

 

US

Wells Fargo & Co

4th-Quarter results

 

US

Goldman Sachs

4th-Quarter results

 

US

State Street

4th-Quarter results

 

US

Bank of New York Mellon

4th-Quarter results

 

US

Ebay

4th-Quarter results

Thursday, January 20th

 

SW

Investor (B)

annual results

 

US

Morgan Stanley

4th-Quarter results

 

US

Google

4th-Quarter results

 

US

Unitedhealth Group

4th-Quarter results

 

US

Advanced Micro Devices

4th-Quarter results

 

US

Union Pacific

4th-Quarter results

Friday, January 21st

 

SP

Bankinter

annual results

 

US

Schlumberger

4th-Quarter results

 

US

Bank of America

4th-Quarter results

 

US

General Electric

4th-Quarter results

 

US

Legg Mason Inc

3rd-Quarter results

 

US

Suntrust Banks

4th-Quarter results


Economic Calendar (CET) January 17th - January 21st

Date

Market

Economic data

Period

Expected

Last

Monday, January 17th

   

No major economic event expected

     

Tuesday, January 18th

10:30:00

UK

CPI - EU Harmonised (MoM)

DEC

NA

0.4%

11:00:00

GE

Zew Survey (Econ. Sentiment)

JAN

NA

4.3

11:00:00

GE

Zew Survey (Current Situation)

JAN

NA

82.6

14:30:00

US

Empire Manufacturing

JAN

12.8

10.6

16:00:00

US

NAHB Housing Market

JAN

17

16

border=0 Wednesday, January 19th

10:00:00

EC

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

NOV

NA

-2.3

10:30:00

UK

Unemployment Rate (ILO)

NOV

NA

7.9%

14:30:00

US

Housing Starts (Thsd)

DEC

550

555

14:30:00

US

Bulding Permits (Thsd)

DEC

551

544

border=0 Thursday, January 20th

08:00:00

GE

Producer Price Index (MoM)

2Q

NA

0.2%

16:00:00

US

Existing Home Sales (Mln)

DEC

4.81

4.68

16:00:00

US

Philadelphia Fed.

JAN

21.8

24.3

16:00:00

US

Leading Indicators

DEC

0.6%

1.1%

16:30:00

US

Crude Oil Inventories (WoW chg)

W2

NA

-2154

border=0 Friday, January 21st

10:00:00

GE

IFO - Business Climate

SEP

NA

109.9

10:00:00

GE

IFO - Current Assessment

JAN

NA

112.9

10:00:00

GE

IFO - Expectations

JAN

NA

106.9

10:30:00

UK

Retail Sales (MoM)

DEC

NA

0.3%

INTERNAXX

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

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