Market Outlook June 20th - June 24th Print

 

Market Outlook

- WALL STREET:
US indices consolidated last week while the Nasdaq extended its losing streak, declining 1.27%. On the economic data front, the Empire State Manufacturing Index dropped to -7.79 (+12 expected) in June, its lowest level since November 2010. Also, the consumer-price-index rose 0.2% (+0.1% expected) and the core CPI increased 0.3% (+0.2% expected) while industrial production rose 0.1% in May (+0.2% expected). Regarding sectors, banks and consumer durables rose over 2% followed by real estate (+1.89%), while semiconductors (-2.06%), materials (-1.96%) and energy (-1.65%) lost most. Technically, the S&P500 index is approaching from a key support base around 1250. A pause is likely. Eye choppy price action between 1325 and 1250.

- EUROPE:
In the UK, the FTSE 100 fell 0.88% last week. Looking at economic data, UK May retail sales fell 1.4% MoM (-0.6% expected) vs +1.2% in April and May CPI rose 4.5% YoY, as expected. From a chartist point of view, a support base has shaped around the 6140 mark and has allowed for a temporary stabilization. In Europe, the DAX and the IBEX finished higher, gaining 1.33% and 1.85% respectively while the OMX and the SMI declined most, losing 1.12% and 2.01%. In other news, Greece's credit rating was downgraded to "CCC" from "B" at S&P's with a "negative" outlook. Euro-Zone's CPI rose 2.7% YoY in May, as expected and lower than +2.8% in April. As for European sectors, financial services had the weakest performance (-2%) followed by retail (-1.81%) and basic resources (-1.77%). In the other hand, automobiles, banks and insurance, telecoms, food and beverage closed into positive territory last week. From a technical view, the Stoxx 600 is challenging a rising trend line support currently around 265. Look for a temporary stabilization towards 275.

  June 20th - June 24th

 Market Round up

 

Weekly chg (%)

Last

Dow Jones

.4

12004.4

Nasdaq 100

-1.3

2193

Dax Xetra

1.3

7164.1

Cac 40

.5

3823.7

Foreign Exchange

Euro/dollar : the pair is pulling back on its support ahead of further advance. LONG above 1.3950 towards 1.47 & 1.49.

Dollar/yen : the pair has validated a bearish flag and is challenging its support. SHORT below 82.5 with 79.50 or even 78.25 in sight.

Company preview

Carnival (GBp 2211 ; -3.83% ; CCL ; CCL.L)
On Tuesday, Carnival Plc is expected to release 2Q pre-tax profit of appx. $184M vs $252M a year earlier on revenues of $3.5B vs $3.2B. Recently, the Co expected the revised impact from the geopolitical situation in the Middle East, as well as the earthquake in Japan to cost the Co an additional $0.15 per share for the 2H of 2011, and the increases in fuel prices net of currency exchange rates to cost appx. $0.05 per share. Technically, the stock continues to move downward, and the upside potential should be limited by its bearish 20D MA. Below 2350p, look for a new decline towards 2025p.

Adobe Systems (USD 30.47 ; -3.79% ; ADBE ; ADBE.O)
The same day in the US, Adobe Systems, the well-known global technology company, may announce 2Q EPS of around $0.51 vs $0.31 a year ago on sales of $996M vs $943M. The analysts from Bank of America expect the Co to post a good 2Q result, according to Bloomberg news. From a chartist view, the stock is accelerating on the downside during the latest days following the break below a MT rising trend line. Nevertheless, the strong support level at $30 may call for a ST technical rebound to $32 in the forthcoming days.

Hennes & Mauritz (SEK 213.6 ; -3.91% ; HMB ; HMb.ST)
On Wednesday, H&M, Europe's second largest clothing retailer, is expected to publish 2Q net income of SK4.3B vs SK5.2B a year ago. Last week, the group said May 2011 total sales including VAT increased by 12% YoY and 2Q11 sales excluding VAT amounted to SEK27.6B, an increase of 2% YoY, but lower than expectations. The shares fell sharply after the sales release. Technically, as long as the nearest bearish gap remains open, look for a new leg down to 210 and 200 in extension.

Fedex Corp (USD 86.99 ; 1.89% ; FDX ; FDX.N)
On the same day, in the US, Fedex Corp could deliver 4Q EPS of appx. $1.72 compared to $1.33 a year earlier on sales of $10.4B vs $9.4B. Earlier, the Board of FedEx declared a quarterly cash dividend of $0.13 per share, an increase of $0.01 per share over the previous dividend payment. From a chartist view, the stock remains under pressure below its ST declining moving average. A break below $85 would trigger a slump towards $80.

Oracle (USD 31.185 ; 0.02% ; ORCL ; ORCL.O)
On Thursday, Oracle, the US IT giant, may post 4Q EPS of $0.71 compared to $0.51 a year earlier on sales of around $10.7B vs $9.6B. Recently, the Co was taking Google to Court as the Co claims that the latter's Android mobile phone software infringes its Java intellectual property. From a technical view, the stock broke below its previous ST support at $32, and remains on the downside. Therefore, A further decline is more likely to $29.5 at first.

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


Corporate Calendar June 20th - June 24th

Date

Market

Company

Event

Monday, June 20th

   

No major release expected

 

Tuesday, June 21st

 

UK

Carnival

1st-Half results

 

US

Adobe Systems

2nd-Quarter results

 

US

Carnival

2nd-Quarter results

 

US

Darden Restaurants

4th-Quarter results

 

US

Jabil Circuit

3rd-Quarter results

 

US

Walgreen

3rd-Quarter results

Wednesday, June 22nd

 

SW

Hennes & Mauritz

2nd-Quarter results

 

UK

Chemring Group

1st-Half results

 

US

Bed Bath & Beyond

1st-Quarter results

 

US

CarMax

1st-Quarter results

 

US

Fedex Corp

4th-Quarter results

 

US

Red Hat

1st-Quarter results

Thursday, June 23rd

 

UK

Dixons Retail

annual results

 

UK

Micro Focus International

annual results

 

US

Conagra Foods

4th-Quarter results

 

US

H&R Block

4th-Quarter results

 

US

Lennar Corp

2nd-Quarter results

 

US

Oracle

4th-Quarter results

Friday, June 24th

 

UK

Berkeley Group

annual results


Economic Calendar (CET) June 20th - June 24th

Date

Market

Economic data

Period

Expected

Last

Monday, June 20th

08:00:00

GE

Producer Price Index (MoM)

2Q

NA

1%

10:00:00

EC

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

APR

NA

-3.8

Tuesday, June 21st

10:30:00

UK

Public Sector Net Borrowing (Bln)

MAY

NA

7.713

10:30:00

UK

Public Finances (PSNCR) (Bln)

MAY

NA

3.259

11:00:00

GE

Zew Survey (Econ. Sentiment)

JUN

NA

3.1

11:00:00

GE

Zew Survey (Current Situation)

JUN

NA

91.5

16:00:00

US

Existing Home Sales (Mln)

MAY

4.86

5.05

Wednesday, June 22nd

08:45:00

FR

Business Confidence Indicator

JUN

NA

107

08:45:00

FR

Production Outlook Indicator

JUN

NA

15

16:00:00

EC

Euro-Zone: Consumer Confidence

MAY

NA

-9.8

16:30:00

US

Crude Oil Inventories (WoW chg)

W24

NA

-3406

18:30:00

US

Fed: Rates decision

 

0.25%

0.25%

Thursday, June 23rd

16:00:00

US

New Home Sales (Thsd)

MAY

310.17

323

Friday, June 24th

10:00:00

GE

IFO - Business Climate

SEP

NA

114.2

13:59:00

GE

Retail Sales (MoM)

APR

NA

0.3%

14:30:00

US

GDP (QoQ)

1Q

2%

1.8%

14:30:00

US

Personal Consumption

1Q

NA

2.2%

14:30:00

US

Durable Goods Orders

MAY

1.5%

-3.6%

14:30:00

US

Durable Goods Ex Transportation

MAY

0.6%

-1.6%


 

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

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