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Market Outlook January 3rd - January 7th PDF Print E-mail

Market Outlook

- WALL STREET:
US indices ended the year on record highs as the S&P added 13% in 2010. The S&P 500 and the Dow Jones reached their highest weekly close level since August 2008 while the Nasdaq 100 drew a consolidation after reaching the previous week its highest level since February 2001. Economic data released last week were mixed as weekly jobless claims fell by 34k to 388k (415K expected) and reached their lowest level since July 2008. Also, the Chicago purchasing manager index rose to 68.6 in December (61.0 expected): its highest level since 1988. However, the S&P/Case-Shiller 20-city composite home-price index fell 0.8% on an annual basis (-0.2% expected) in October. Also, the Conference Board's confidence index slid to 52.5 in December (56.3 expected) from an upwardly revised 54.3 the prior month and the Dallas Fed manufacturing activity index dropped to 12.8 in December (17.0 expected) from 16.2 the prior month. Regarding sectors, real estate gained 1.46% whereas; household and personal good declined almost 1%. Technically, the S&P 500 is expected to rise towards 1285 and 1304 in the coming days.

- EUROPE:
In the UK, the FTSE 100 fell sharply on a half trading week. Nevertheless, the index rose 9% in 2010, outperforming the 8.6% advance of the Stoxx 600. On the economic data front, December Nationwide house price unexpectedly rose 0.4% YoY (-0.3% expected) vs +0.4% in November. From a technical point of view, a limited consolidation below the previous high cannot be ruled out but its extent should be limited. In the rest of Europe, IBEX and S&P MIB declined the most. German December CPI rose 1.7% YoY (1.5% expected) vs 1.5% in November while Euro-zone M3 unexpectedly rose 1.9% YoY (+1.6% expected) vs 0.9% in November. All European sectors ended into negative territory with automobile declining more than 4%. Technically, on the Stoxx 600, a short-term limited consolidation is expected but the long-term rising trend line currently at 268 maintains a bullish bias.

January 3rd - January 7th

Market Round up

 

Weekly chg (%)

Last

Dow Jones

0

11577.5

Nasdaq 100

-.6

2217.9

Dax Xetra

-2.2

6914.2

Cac 40

-2.5

3804.8

Foreign Exchange

Euro/dollar : the pair has struck against its intermediary resistance and remains under pressure. SHORT below 1.38 towards 1.29 & 1.26.

Dollar/yen : the pair has struck against its resistance and is pulling back on its new support. LONG @ 80.70 with 84.5 or even 86 in sight.

 

Company preview

Alcatel - Lucent (EUR 2.18 ; -0.68% ; ALU ; ALUA.PA )
Alcatel-Lucent agreed last week to pay more than $137m to settle US charges ($92m to settle criminal charges filed by the Justice Department and more than $45m to civil charges by the SEC) that it paid millions of dollars in bribes to foreign officials to win business in Latin America and Asia, saying "it will not impact this year's results". From a technical point of view, Alcatel-Lucent's stock is stabilizing. It remains cap by its flat 20d and declining 50d MA. Below 2.25 expect further downside.

WPP Group (GBp 789.5 ; -0.25% ; WPP ; WPP.L)
WPP has agreed last week to acquire all the assets of privately held Blue State Digital. The companys annual revenue has grown in excess of 30% per year since its founding in 2004. BSD employs 130 people across its offices in Washington DC, Boston, New York, Los Angeles and London.Technically, LMVH stock has been in a rising channel since early December and no faces a strong resistance at 800. The stock is still supported by its 20D and 50D moving averages. A consolidation can be considered at ST but consider a further upside at mid-term with 820 and 840 as next targets.

Royal Bank Of Scotland Group (GBp 39.07 ; -3.98% ; RBS ; RBS.L)
Royal Bank of Scotland : The five-star Grosvenor House Hotel has been sold by Royal Bank of Scotland last week after a sale process that dates back to 2007. The landmark hotel and venue for some of London's largest award ceremonies was sold to Indian conglomerate Sahara for 470m. From a chart point of view, the stock is validating a bearish head and shoulders pattern and is still capped by its moving averages. Expect further decline towards 37.4 and 36.

Family Dollar Stores (USD 49.71 ; 0.08% ; FDO ; FDO.N)
The discount store chain reports its 1Q results on Wednesday. Analysts expects adjusted EPS of 0.61 dollar vs $0.49 a year ago on sales of $1.98bln vs $1.82bln a year earlier. Technically, the stock is bouncing up after having consolidated since mid-December. Further upside is expected towards 2010 high at 51.8.

Monsanto (USD 69.64 ; 4.56% ; MON ; MON.N)
The seeds specialist is set to post 1Q results on Thursday. Analysts forecast adjusted EPS of $0.01 vs a loss of $0.02 a year ago on sales of $1.80bln vs $1.70 a year earlier. From a grphic point of view, the stock is posting new highs since having broken the resistance at 64. Next targets at 73 and 76.

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


Corporate Calendar January 3rd - January 7th

Date

Market

Company

Event

Monday, January 3rd

   

No major earnings expected

 

Tuesday, January 4th

   

No major arnings expected

 

Wednesday, January 5th

 

US

Family Dollar Stores

1st-Quarter results

Thursday, January 6th

 

US

Constellation Brands

3rd-Quarter results

 

US

Monsanto

1st-Quarter results

Friday, January 7th

   

No major earnings expected

 


Economic Calendar (CET) January 3rd - January 7th

Date

Market

Economic data

Period

Expected

Last

Monday, January 3rd

16:00:00

US

Construction Spending (MoM)

NOV

0.1%

0.7%

16:00:00

US

ISM - Manufacturing

DEC

57.1

56.6

16:00:00

US

ISM - Price Paid

DEC

71.8

69.5

Tuesday, January 4th

08:45:00

FR

Consumer Confidence

DEC

NA

-32

09:55:00

GE

Unemployment Change (Thsd)

DEC

-14.5

-9

09:55:00

GE

Unemployment Rate

DEC

7.5%

7.5%

16:00:00

US

Factory Orders

NOV

0%

-0.9%

23:00:00

US

Total Vehicule Sales (Mln)

DEC

12.3

12.26

23:00:00

US

Domestic Vehicule Sales (Mln)

DEC

9.21

9.27

Wednesday, January 5th

11:00:00

EC

Euro-Zone: PPI (MoM)

NOV

0.2%

0.4%

16:00:00

US

ISM - Non Manufacturing

DEC

55.7

55

16:30:00

US

Crude Oil Inventories (WoW chg)

W52

NA

-1258

Thursday, January 6th

11:00:00

EC

Euro-zone: Industrial Confidence

DEC

2

.9

11:00:00

EC

Business Climate Indicator

DEC

18.84

.96

11:00:00

EC

Euro-Zone: Economic Confidence

DEC

105.9

105.3

11:00:00

EC

Euro-Zone: Consumer Confidence

DEC

-10.3

-11

11:00:00

EC

Euro-Zone: Retail Trade (MoM)

NOV

0.3%

0.1%

14:30:00

US

Initial Jobless Claims (Thsd)

W52

399

388

Friday, January 7th

08:00:00

GE

Retail Sales (MoM)

NOV

0.7%

2.3%

11:00:00

EC

Euro-Zone: GDP (QoQ)

3Q

0.4%

0.4%

12:00:00

GE

Industrial Production (MoM)

NOV

-0.4%

2.9%

14:30:00

US

Unemployment Rate

DEC

9.7%

9.8%

14:30:00

US

Change in Nonfarm Payrolls (Thsd)

DEC

140.43

39

14:30:00

US

Change in Manufact. Payrolls (Thsd)

DEC

0

-13

INTERNAXX

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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