Market Outlook July 5th - July 9th Print

 

Market Outlook

- US : US indices plunged last week, with the Nasdaq losing almost 6%. Real Estate & Bank sectors declined the most (more than 8%) while Food & Beverage and Household & Personal Goods eased less than 1%. The major indices closed in the red territory every trading day of last week. Tuesday the market declined the most after the release of June Consumer Confidence at 52.9 against 62.5 expected. Friday, was mixed on the economic front with May Factory orders declining 1.4% against an expected decline of 0.5%. However, the market found some support with the decrease in unemployment rate published at 9.5% against 9.8% expected. From a technical point of view, the S&P500 has broken below the 1050 key threshold opening the way towards 1000 & 950.

- EUROPE : European markets extended their decline last week. Basic Resources sector lead the movement plunging more than 8%. On the contrary Oil & Gas and Health Care stocks eased the less. On the Stoxx 600, since the downside breakout of 244, any potential chance for a rebound vanished and clearly turned the outlook to bearish. The next down targets are set at 230 and 223.

July 5th - July 9th

Market Round up

 

Weekly chg (%)

Last

Dow Jones

-4.5

9686.5

Nasdaq 100

-6

1728.3

Dax Xetra

-5.2

5834.2

Cac 40

-6.1

3357.3

Foreign Exchange

Euro/dollar : The pair remains within a MT bearish channel, the RSI is turning down. SHORT below 1.2650 towards 1.1750 & 1.12.

Dollar/yen : The pair is under pressure and is breaking below its channel lower boundary. SHORT @ 91.8 with 87.50 or even 85 in sight.

Company preview

Micron Technology (USD 8.22 ; -13.11% ; MU ; MU.N)
Last week, Micron Technology, the US DRAM chips manufacturer, reported 3Q EPS of $0.92 (adjusted EPS was about $0.45 vs $0.43 expected) vs a LPS of $0.57 a year ago on revenue of $2.3bln ($2.1bln expected) vs $1.11bln for same period a year earlier. Technically, the stock price is close to a key support at $8.0. The risk is a slide below this level, which should trigger a downside acceleration towards 7.0 in the forthcoming days.

Family Dollar Stores (USD 38.62 ; 1.21% ; FDO ; FDO.N)
On Wednesday, Family Dollar Stores, a national discount store chain, is expected to release 3Q EPS of $0.76 compared to $0.62 a year earlier on sales of $2bln vs $1.84bln. From a chartist point of view, the shares bounced off from the 100D MA last week, but are still under pressure below a major resistance at $40. A test of the $40 threshold should be in sight before any further upsides.

Sodexo (EUR 45.865 ; -2% ; SW ; EXHO.PA)
Thursday, Sodexo, the provider of comprehensive on-site service solutions, may deliver its 3Q results. The Co's revenues are expected to achieve around E3.9bln compared to E3.8bln a year ago. Last week, the Co's price target was cut to E43 from E45 at Societe Generale ("hold" rating unchanged). Technically, the stock broke down a MT rising trend line a week ago and is also capped by its 50D MA. A further pullback is therefore expected to E44 and E42 in extension.

DNB Holding (NOK 63.95 ; -3.91% ; DNBNOR ; DNB.OL)
On Friday, DoB NOR, a commercial bank, is expected to unveil 2Q net income of appx. NK2.8bln compared to NK1.2bln last year. Graphically, the stock is currently trading within a range between NK70 and NK60 and may test the lower boundary at first in the coming days.

Progressive (USD 18.62 ; -4.46% ; PGR ; PGR.N)
The same day in the US, Progressive Corp, the US insurance Co, could publish 2Q EPS of $0.36 compared with $0.35 a year ago. Last month, the Co reported May 2010 net income of $44.2m vs $54.6m in May 2009, down 19%. From a technical view, the stock is trading on the downside and is capped by a declining 20D MA. We expect a test of $18, if broken, look for $17.4 and $16.7 in extension.

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


Corporate Calendar July 5th - July 9th

Date

Market

Company

Event

Monday, July 5th

 

SW

Industrivarden AB

2nd-Quarter results

Wednesday, July 7th

 

US

Family Dollar Stores

2nd-Quarter results

Thursday, July 8th

 

FR

Sodexo

3rd-Quarter results

Friday, July 9th

 

NO

DNB Holding

2nd-Quarter results

 

US

Progressive

2nd-Quarter results


Economic Calendar (CET) July 5th - July 9th

Date

Market

Economic data

Period

Expected

Last

Monday, July 5th

11:00:00

EC

Euro-Zone: Retail Trade (MoM)

MAY

0.5%

-1.5%

Tuesday, July 6th

16:00:00

US

ISM - Non Manufacturing

JUN

55.1

55.4

Wednesday, July 7th

08:45:00

FR

Trade Balance (Mln)

MAY

NA

-4248

11:00:00

EC

Euro-Zone: GDP (QoQ)

1Q

0.2%

0.2%

Thursday, July 8th

12:00:00

GE

Industrial Production (MoM)

MAY

1%

0.9%

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)

W26

463

472

17:00:00

US

Crude Oil Inventories (WoW chg)

W26

NA

-2007

21:00:00

US

Consumer Credit (Bln)

MAY

-1.077

.955

Friday, July 9th

08:00:00

GE

Consumer Price Index (MoM)

JUN

0.1%

0.1%

08:00:00

GE

CPI - EU Harmonised (MoM)

JUN

0%

0%

10:30:00

UK

Trade Balance Non EU25 (Mln GBP)

MAY

NA

-3991

10:30:00

UK

Visible Trade Balance (Mln GBP)

MAY

NA

-7279

10:30:00

UK

PPI - Input (MoM)

JUN

NA

-0.6%

16:00:00

US

Wholesale Inventories

MAY

0.4%

0.4%


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