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Market Outlook January 31st - February 4th PDF Print E-mail

Market Outlook

- WALL STREET:
US indices erased their earlier gains last week amid a bunch of earnings releases with Ford Motor announcing 4Q net income at $190m or $0.05 per share, down $696m YoY hurt by a previously disclosed $960m charge for completion of debt conversion offers in the quarter that reduced outstanding Automotive debt by over $1.9bln. On the economic data front, home prices fell 1.6% in 20 major US cities from November the prior year according to the Case-Shiller home-price index. Also, US real GDP rose at 3.2% annualized rate in 4Q (+3.5% expected) while the Thomson Reuters/University of Michigan final index of consumer sentiment fell to 74.2 in January (73.3 expected) from 74.5 the prior month. On Wednesday, the FOMC kept its key interest rate at historic low range of 0% to 0.25% and held its plan to buy $600 billion in Treasuries through June. Regarding sectors, semiconductors and technology hardware gained the most whereas automobiles and consumer services were under pressure. Technically, the S&P 500 closed below its 20D MA for the first time since December 1st.

- EUROPE:
In the UK the FTSE 100 fell to the 50D MA during the last trading week with an appx. 0.25% loss. On the economic data front, January house prices fell 2.2% YoY vs -1.6% last month and 4Q 2010 GDP fell 0.5% QoQ (+0.5% expected) vs. +0.7% in 3Q. In other European news, Euro-zone M3 rose 1.6% YoY (+1.6% expected) vs 1.3% in November. France's January 2011 PMI Manufacturing was 54.3 (57.3 expected) vs 57.2 last month. Germany's PMI Manufacturing reached 60.2 (60.9 estimated) vs 60.7 in December. In the rest of Europe, the DAX gained most (+0.57%) among all European indices, while the IBEX fell 0.76% during the week. Technology, insurance sectors gained the most, whereas, food & beverage and utilities ended into negative territory. Technically, the Stoxx 600 is challenging its 20D MA which remains on the upside.


Market Round up

 

Weekly chg (%)

Last

Dow Jones

-.4

11823.7

Nasdaq 100

.1

2270.5

Dax Xetra

.6

7102.8

Cac 40

-.4

4002.3

Foreign Exchange

Euro/dollar : the pair is escaping from a bearish channel while key moving averages are reversing up, the RSI is well directed. LONG above 1.3065 towards 1.38 & 1.4250.

Dollar/yen : the pair is capped by a declining trend line and should face a further weakness. SHORT below 84.50 with 80.35 or even 79 in sight.

Company preview

BP (GBp 486.8 ; -2.11% ; BP/ ; BP.L)
On Tuesday, BP reports its FY results. Pre-tax profit is expected to reach appx. $28.7bln compared to $25.1bln a year ago. Last week, the Co's venture with Russian investors, TNK-BP planned to invest appx. $2.9bln to further expand in Russia through 2015. Recently, BP signed a strategic framework agreement with OAO Rosneft, related to building on their planned Arctic offshore exploration venture and share swap. Technically, the stock remains well positively oriented, backed by its rising 50D MA. Above 450p, look for further upsides to 517p and 530p in extension.

Roche (CHF 144.1 ; 2.34% ; ROG ; ROG.VX)
Wednesday, Roche Holding, the Switzerland-based pharmaceuticals and diagnostics giant, could announce FY net income of around SF11.2bln vs SF7.8bln a year earlier on sales of SF48.4bln vs SF49bln. Recently, the Group's unit, Genentech and Biogen won the US FDA approval for the use of Rituxan drug as a maintenance treatment for patients with advanced follicular lymphoma. From a technical view, the stock is now very close to its key resistance around SF147. Hence, a ST consolidation cannot be ruled out before any further advance.

Time Warner (USD 31.72 ; -3.26% ; TWX ; TWX.N)
The same day, Time Warner, the US media and entertainment company, may unveil 4Q EPS of $0.62, in line with a year earlier on sales of around $7.5bln vs $7.3bln. Earlier, the Co could consider purchasing some assets from Dogan Yayin Holding, Turkish media group, according to CEO Jeffrey L. Bewkes. From a chartist view, the stock price failed to surpass its 2010's high at $34 and also broke below the $32.75 support. A further decline is therefore expected to $29.6 at first.

border=0 Deutsche Bank (EUR 43.63 ; -1.46% ; DBK ; DBKGn.DE)
On Thursday, Deutsche Bank will post its FY results, before the market opens. The bank could publish FY10 net income of appx. E4.4bln compared to nearly E5bln a year earlier. Recently, the Focus magazine reported that the bank's CEO Josef Ackermann wouldn't renew his contract after the expiration date in 2013. Technically, the stock consolidated last week but still remains above its ascending 20D MA. As long as E42 is not broken down, expect a new up leg to E46.35 in the forthcoming days.

Unilever (EUR 21.615 ; -5.49% ; UNA ; UNc.AS)
On the same day, Unilever is expected to release FY net income of E4.3bln compared to E3.4bln a year ago on revenues of E44.2bln vs around E40bln. Earlier, CEO Paul Polman said profits and volume increased in 2010, reported by Le Figaro. Recently, the stock was upgraded to "overweight" from "neutral" at HSBC. From a technical view, the shares remain under pressure after the downside breakout of a rising trend line's support. The price should test its next key support around E21 in the coming days.

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

Corporate Calendar January 31st - February 4th

Date

Market

Company

Event

Monday, January 31st

 

GE

Qiagen

4th-Quarter results

 

IR

Ryanair

3rd-Quarter results

 

US

Exxon Mobil

4th-Quarter results

 

US

Illinois Tool Works

4th-Quarter results

 

US

Novellus Systems

4th-Quarter results

 

US

Eastman Chemical

4th-Quarter results

Tuesday, February 1st

 

GE

Infineon Technologies

1st-Quarter results

 

UK

BP

annual results

 

UK

ARM Holdings

annual results

 

US

Sysco

2nd-Quarter results

 

US

Electronic Arts

3rd-Quarter results

 

US

UPS

4th-Quarter results

Wednesday, February 2nd

 

SP

BBVA

annual results

 

SW

Electrolux (B)

annual results

 

SZ

Roche

annual results

 

US

Time Warner

4th-Quarter results

 

US

Visa Inc

1st-Quarter results

 

US

Whirlpool

4th-Quarter results

Thursday, February 3rd

 

GE

Deutsche Bank

annual results

 

NE

Unilever

annual results

 

NE

Royal Dutch Shell

annual results

 

US

Mastercard

4th-Quarter results

 

US

Dow Chemical

4th-Quarter results

 

US

Merck & Co

4th-Quarter results

Friday, February 4th

 

FR

LVMH

annual results

 

SW

Volvo (B)

annual results

 

US

Fortune Brands

4th-Quarter results

 

US

Tyson Foods

1st-Quarter results

 

US

Aetna

4th-Quarter results

 

US

AON Corp

4th-Quarter results


 INTERNAXX

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

 

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