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Market Outlook June 13th - June 17th PDF Print E-mail

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Market Outlook

- WALL STREET:
US indices extended their decline last week with the Dow Jones down 1.64% and the S&P 500 down 2.24%. Both indexes made a new low since the end of March. This is the sixth straight week drop for US stocks. Investors are concerned that the slowing of the economy is intensifying. On the economic data front, initial jobless claims rose to 427K for the week ended June 4 (419K expected) vs 426K the week before (revised from 422K). This week will be busier with May retail sales on June 14th and consumer price index, empire manufacturing and industrial production on May 15th. Regarding sectors, automobiles & components lost most by over 4.64%, followed by tech. hardware (-4.56%) and real estate (-3.86%). No sectors closed into positive territory during the week. Technically, the S&P500 index remains under pressure below its 20D MA, and may post further weakness to 1255 and 1223.

- EUROPE:
In the UK, the FTSE 100 lost 1.52% last week. Industrial production unexpectedly dropped 1.7% in April after a a 0.2% increase in March (revised from +0.3%) It was expected flat by economists. From a chartis view, below 6100, expect a return to 5600 and then to 5440.In Europe, all major stock markets ended into negative territory last week. The OMX and the SMI declined most by 5.5% and 3.28%, respectively, while the Cac 40 fell by 2.20% and the DAX lost 0.55% during the week.As for European sectors, banks lost most by over 3.95%, followed by retail (-3.24%) and techs (-3.15%). No sectors closed into positive territory during the week.From a technical view, the daily technical indicators on the Stoxx 600 are bearish and do not show any reversal signs. Look for further down move with 262.15 and 256.50 as main targets.

June 13th - June 17th

Market Round up

 

Weekly chg (%)

Last

Dow Jones

-1.6

11951.9

Nasdaq 100

-3.1

2221.1

Dax Xetra

-.6

7069.9

Cac 40

-2.2

3805.1

Foreign Exchange

Euro/dollar : the pair has rebounded on its strong support and remains on the upside as the RSI is well directed. LONG above 1.3950 towards 1.49 & 1.5150.

Dollar/yen : the pair has validated a bearish flag and remains under pressure. SHORT below 82.5 with 79.50 or even 78.25 in sight.

Company preview

 Nokia (EUR 4.3 ; -4.06% ; NOK1V ; NOK1V.HE)
Last week, Nokia's Chief Technology Officer Rich Green took a leave of absence for personal reasons, reported by Helsingin Sanomat newspaper. The Finnish cell phone maker's debt rating was downgraded by S&P's to BBB+ from A-. The Co's share price lost ground during the past two weeks after the Co cut its sales forecast for the 2Q 2011. Technically, even though a technical rebound cannot be ruled out in the short term, its extent should be limited below E5.

Texas Instruments (USD 32.15 ; -4.03% ; TXN ; TXN.N)
Texas Instruments, the US semiconductor giant, lowered its 2Q revenue guidance last week to $3.36B-$3.5 from $3.41B-$3.69B previously expected, mainly due to Nokia, and EPS guidance to $0.51-$0.55 from $0.52-$0.6. From a chartist view, the stock is accelerating on the downside following the break below $34. The price should now challenge its $32 support at first before a new move down to $30.

Best Buy (USD 28.43 ; -7.18% ; BBY ; BBY.N)
On Tuesday, in the US, Best Buy Co, the US retailing giant, is expected to announce 1Q EPS of $0.33 vs $0.36 a year earlier on sales of $10.7B vs around $10.8B. Recently, the Co's Asia Pacific President Kal Patel may have stepped down, and CFO David Deno for the Co's international unit would replace his post, according to Guangzhou Daily. From a technical view, the stock is pulling back to test its key support around $28.30, if breakout, look for a new weakness towards $27.50.

Inditex (EUR 60.31 ; -2.93% ; ITX ; ITX.MC)
On Wednesday, Inditex could deliver 1Q net income of E315M compared with E301M a year earlier on revenues of appx. E3B vs E2.7B. Earlier, the Co's price target was raised to E70 ("buy") from E60 ("neutral") at UBS. In addition, the group acquired the companies operating its fashion concepts in Serbia and Montenegro, which were formerly managed under a franchise agreement with Delta Sport. Technically, the stock is now very close to its ST support at E60. The risk is now a slide below this level, which should trigger a further pullback towards E55.

Kroger (USD 23.28 ; -1.23% ; KR ; KR.N)
Thursday, Kroger, the US operator of supermarkets and convenience stores, is expected to release 1Q EPS of $0.65 compared to $0.58 a year earlier on sales of around $26.5B vs $24.7B. From a chartist view, the stock price is now testing the lower boundary of its MT bullish channel. As long as E23 holds on the downside, look for a technical rebound to E24 at first.

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

Corporate Calendar June 13th - June 17th

Date

Market

Company

Event

Monday, June 13th

  

No major release expected

 

Tuesday, June 14th

 

US

Best Buy

1st-Quarter results

Wednesday, June 15th

 

SP

Inditex

1st-Quarter results

Thursday, June 16th

 

US

Kroger

1st-Quarter results

Friday, June 17th

  

No major release expected

 

Economic Calendar (CET) June 13th - June 17th

Date

Market

Economic data

Period

Expected

Last

Monday, June 13th

  

No major economic event expected

   

Tuesday, June 14th

10:30:00

UK

CPI - EU Harmonised (MoM)

MAY

NA

1%

14:30:00

US

Producer Price Index (MoM)

MAY

0.1%

0.8%

14:30:00

US

Retail Sales

MAY

-0.4%

0.5%

14:30:00

US

Retail Sales less Autos

MAY

0.2%

0.6%

14:30:00

US

PPI - Ex Food & Energy (MoM)

MAY

0.2%

0.3%

16:00:00

US

Business Inventories

APR

1%

1.1%

Wednesday, June 15th

10:30:00

UK

Unemployment Rate (ILO)

APR

NA

7.7%

11:00:00

EC

Euro-Zone: Industrial Production (MoM)

APR

NA

-0.1%

14:30:00

US

Consumer Price Index (MoM)

MAY

0.1%

0.4%

14:30:00

US

Empire Manufacturing

JUN

12.3

11.9

15:15:00

US

Industrial Production (MoM)

MAY

0.26%

-0.01%

16:00:00

US

NAHB Housing Market

JUN

17

16

Thursday, June 16th

10:30:00

UK

Retail Sales (MoM)

MAY

NA

1.2%

11:00:00

EC

Euro-Zone: CPI (MoM)

MAY

NA

0.6%

14:30:00

US

Housing Starts (Thsd)

MAY

536

523

14:30:00

US

Bulding Permits (Thsd)

MAY

551

563

16:00:00

US

Philadelphia Fed.

JUN

7

3.9

Friday, June 17th

08:45:00

FR

Wages (QoQ)

2Q

NA

1%

11:00:00

EC

Euro-Zone: Trade Balance (Bln)

APR

NA

2800.7

11:00:00

EC

Euro-Zone: Trade Balance (Bln) (MoM)

APR

NA

2800.7

15:55:00

US

U. of Michigan Confidence

MAY

74.3

74.3

16:00:00

US

Leading Indicators

MAY

0.2%

-0.3%

 

This document does not constitute financial advice. If you require such advice, you should seek appropriate professional advice. Internaxx accepts no responsibility for the conten.

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