Market Outlook - June 21st - June 25th Print

 

 

Market Outlook

- US : US indices continued to rally last week driven by strong gains in the Semiconductors (+4.79%), Tech. Hardware (+4.39%) and Insurance (+3.95%) sectors. From a technical point of view on the S&P 500: daily indicators are turning up. The rise above 1110 has opened the way to a larger bounce to 1130 (50% retracement of the last down move) and then 1051 (61.8%), a key level to break to see further upside. Alternatively, a break below 1085 (just below the rising 20d MA) would reinstate the broad index in its consolidating range.

- EUROPE : European markets extended their bounce last week helped by shares in the Banks (+5.98%), Insurance (+4.4%) and Media (+3.46%) sectors. On the STOXX 600, the close above the 253 level should allow the index to rise to 260 & 265 at first. Daily indicators are reversing up and only a break of the 244 would reinstate the index in a downside mode.

June 21st - June 25th

Market Round up

 

Weekly chg (%)

Last

Dow Jones

2.3

10450.6

Nasdaq 100

3.6

1913.5

Dax Xetra

2.8

6217

Cac 40

3.7

3687.2

Foreign Exchange

Euro/dollar : The pair has rebounded on its support but stands below its new resistance. SHORT below 1.2650 towards 1.1750 & 1.12.

Dollar/yen : The pair is posting a rebound but its extend should be limited on the upside. SHORT @ 94 with 87.50 or even 85 in sight.

Company preview

Adobe Systems (USD 33.52 ; 5.64% ; ADBE ; ADBE.O)
On Tuesday, Adobe Systems is expected to deliver 2Q EPS of $0.43 compared to $0.29 a year earlier on sales of $906m vs $705m. Earlier this month, the Co unveiled a new digital viewer technology for magazines. Technically, the stock rebounded strongly last week as it formed a ST "double-bottom" pattern. Hence, further upsides seems likely towards $36 in the coming days.

Bed Bath & Beyond (USD 42.49 ; -4.39% ; BBBY ; BBBY.O)
Wednesday, Bed Bath & Beyond, the US operator of a nationwide chain of retail stores, may release 1Q EPS of $0.48 compared with $0.34 a year ago on sales of appx. $1.9bln vs $1.7bln. From a technical point of view, the stock is close to a key horizontal support at $41.85. The risk is a downside breakout of this threshold, which would open the way immediately to $40 and $38.5 in extension.

Nike (USD 74.94 ; 3.61% ; NKE ; NKE.N)
The same day, Nike could publish 4Q EPS of appx. $1, in line with last year on sales of $5.1bln vs $4.7bln. Recently, the Co's price target was cut to $81 from $82 at Morgan Stanley with an "overweight" rating unchanged. From a chartist view, the stock price remains well supported by a MT ascending trend line. As long as $71 holds on the downside, a test of $78.5 (the last swing high) should be in sight.

Hennes & Mauritz (B) (SEK 225.1 ; 1.81% ; HMB ; HMb.ST)
On Thursday, H&M is expected to post 2Q net income of SK5.1bln compared to around SK4.2bln on revenues of SK27.7bln vs SK26.5bln. Recently the Swedish clothes retail giant announced plans to open a store in Turkey in November. Separately, the Co was downgraded to "hold" from "buy" at Deutsche Bank. Graphically, the stock is consolidating but is supported by a MT rising trend line. Above SK217, look for a further bounce to SK234 at first.

Oracle (USD 23.2 ; 2.25% ; ORCL ; ORCL.O)
On the same day in the US, Oracle may unveil 4Q EPS of around $0.54 compared to $0.45 last year on sales of $9.5bln vs $6.86bln. Recently, the Co said it expects to have additional costs of $675m-$825m related to the purchase of Sun Microsystems. In addition, the Co's price target was cut to $30 from $31 at Credit Suisse with an "outperform" rating unchanged. Technically, the stock holds well above its 20D MA following an upside breakout of a bearish trend line. We expect a new leg up to $24.

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


Corporate Calendar June 21st - June 25th

Date

Market

Company

Event

Monday, June 21st

   

No major earnings expected

 

Tuesday, June 22nd

 

DE

Danisco

annual results

 

US

Carnival

2nd-Quarter results

 

US

Walgreen

2nd-Quarter results

 

US

Red Hat

3rd-Quarter results

 

US

Jabil Circuit

2nd-Quarter results

 

US

Adobe Systems

2nd-Quarter results

Wednesday, June 23rd

 

UK

Stagecoach Group

annual results

 

US

Bed Bath & Beyond

1st-Quarter results

 

US

Darden Restaurants

2nd-Quarter results

 

US

Paychex

2nd-Quarter results

 

US

Nike

4th-Quarter results

Thursday, June 24th

 

SW

Hennes & Mauritz (B)

2nd-Quarter results

 

US

Lennar Corp

2nd-Quarter results

 

US

H&R Block

2nd-Quarter results

 

US

Oracle

4th-Quarter results

 

US

McCormick

2nd-Quarter results

 

US

Conagra Foods

2nd-Quarter result

Friday, June 25th

 

UK

Berkeley Group

annual results


Economic Calendar (CET) June 21st - June 25th

Date

Market

Economic data

Period

Expected

Last

Monday, June 21st

   

No major economic data expected

     

Tuesday, June 22nd

10:00:00

GE

IFO - Business Climate

JUN

101.4

101.5

10:00:00

GE

IFO - Current Assessment

JUN

100.1

99.4

10:00:00

EC

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

APR

NA

1.3

10:00:00

GE

IFO - Expectations

JUN

102.6

103.7

16:00:00

EC

Euro-Zone: Consumer Confidence

JUN

-19.3

-18

16:00:00

US

Existing Home Sales (Mln)

MAY

6.11

5.77

Wednesday, June 23rd

08:45:00

FR

Business Confidence Indicator

JUN

NA

96

08:45:00

FR

Production Outlook Indicator

JUN

NA

-3

16:00:00

US

New Home Sales (Thsd)

MAY

432.92

504

16:30:00

US

Crude Oil Inventories (WoW chg)

W24

NA

1690

20:15:00

US

Fed: Rates decision

 

0.25%

0.25%

Thursday, June 24th

08:45:00

FR

Consumer Spending (MoM)

MAY

NA

-1.2%

14:30:00

US

Durable Goods Orders

MAY

-0.9%

2.8%

14:30:00

US

Durable Goods Ex Transportation

MAY

1%

-1.1%

14:30:00

US

Initial Jobless Claims (Thsd)

W24

NA

472

Friday, June 25th

08:00:00

GE

Import Prices (MoM)

MAY

-0.1%

2%

08:45:00

FR

GDP (QoQ)

1Q

NA

0.1%

14:30:00

US

GDP (QoQ)

1Q

3%

3%

14:30:00

US

GDP Price (QoQ)

1Q

1%

1%

14:30:00

US

Personal Consumption

1Q

NA

3.5%

15:55:00

US

U. of Michigan Confidence

JUN

75.6

75.5


 

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