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Market Outlook March 14th - March 18th PDF Print E-mail
 

Market Outlook

- WALL STREET:
US indices fell last week. On the economic data front, the Thomson Reuters/University of Michigan preliminary index of consumer sentiment fell to 68.2 (76.3 expected) in March. US initial jobless claims increased by 26,000 to 397,000 (376K expected) in the week ended March 5th. Also, the January US trade deficit jumped 15.1% to $46.3 billion ($41.5B expected) and inventories at US wholesalers rose 1.1% (+0.9% expected) in January from a 1.3% gain in December. Regarding sectors, semiconductors fell most by almost 5.7%, and energy, materials and technology hardware lost more than 3%, whereas Telecom, real estate, banks and utilities ended into positive territory. Technically, the S&P is now testing its 50D MA. We are cautious now on both ST & MT views and expect a consolidation before further advance towards 1357.

- EUROPE:
In the UK, the FTSE 100 declined by 2.7% last week. The index is now under pressure below its ST moving average and is expected to post further weaknesses to 5800 & 5525. Last week in the UK, the Bank of England kept its benchmark interest rate unchanged at 0.5% (in line with the consensus). Also, UK production prices rose 14.6% YoY in February vs 14.1% YoY in January. In Europe, Germany February CPI rose 2.1% YoY (+2% expected). Moody's cut Spain's credit by one notch to Aa1 with a "negative" outlook and downgraded Greece's government bond ratings to "B1" from "Ba1" with a "negative" outlook. All stock markets in Europe closed into negative territory last week. The DAX and the SMI declined more than 2.7%, while the CAC fell 2.28% during the week. Basic resources lost most by 6.66% and technology, insurance, chemicals and oil & gas were also under pressure with over 3% losses, whereas only telecommunications closed slightly up. Technically, the Stoxx 600 broke below its ST support at 280 and the continuation of the correction seems more likely to 272.80 at first.

  March 14th - March 18th

 

border=0 Market Round up

 

Weekly chg (%)

Last

Dow Jones

-1

12044.4

Nasdaq 100

-2.6

2299.3

Dax Xetra

-2.7

6981.5

Cac 40

-2.3

3928.7

Foreign Exchange

Euro/dollar : the pair has broken above its falling wedge upper boundary and should post a further up move, the RSI is well directed. LONG above 1.34 towards 1.4250 & 1.4450.

Dollar/yen : the pair has rebounded on its support but stands below its new resistance. SHORT below 84.50 with 80.35 or even 79 in sight.

 

Company preview

Generali (EUR 15.52 ; -4.08% ; G ; GASI.MI)
On Wednesday, Assicurazioni Generali, the Italy insurance company is expected to release FY net income of E1.75B compared to E1.3B a year ago. Earlier, the Co said its 2010 gross premiums rose to E73.2B vs E70.5B in 2009, helped by an increase of around 4% in life insurance premiums. Recently, the Co was downgraded to "neutral" from "outperform" at Exane BNP Paribas. Technically, the stock has just broken below its former support at E16 and is expected to return to test E15 in the forthcoming days.

Porsche Pref (EUR 55.71 ; 0.02% ; PAH3 ; PSHG_p.DE)
On Thursday, Porsche may deliver 1H net income of E1.35B compared with a net loss of E379M a year earlier. Early this month, the Co's US unit announced February sales of 2,019 units compared to the same period last year when it sold 1,531, an increase of 32%. From a technical point of view, the stock price validated a MT H&S pattern and also remains under pressure below its nearest bearish gap. Hence, further downsides are more likely to E50 after a pause.

Legal & General (GBp 115.2 ; -5.42% ; LGEN ; LGEN.L)
The same day in the UK, Legal & General could announce FY pre-tax profit of around ?1B compared with ?1.2B a year earlier. Recently, the group appointed Mark Zinkula as CEO of Legal & General Investment Management. The Co was downgraded to "sell" from "neutral" at Goldman Sachs. Graphically, the stock might be forming a double-top pattern with a neckline of 115p. The risk now is a slide below this threshold, which should trigger a bearish acceleration to 110 & 105.

Fedex Corp (USD 90.71 ; 2.28% ; FDX ; FDX.N)
Thursday in the US, Fedex Corp is expected to 3Q EPS of $0.82 compared to $0.76 a year earlier on sales of $9.6B vs $8.7B. Earlier, the board declared a quarterly cash dividend of $0.12 per share on FedEx Corporation common stock. The dividend is payable April 1, 2011 to stockholders of record at the close of business on March 18, 2011. Technically, the stock remains capped by its 20D MA. Below 92.75, look for a further pullback to 85 at first.

Nike (USD 87.17 ; -3.02% ; NKE ; NKE.N)
The same day, Nike will release its 3Q results. The EPS may reach $1.1 compared to $1 a year ago on revenues of around $5.2B vs $4.7B. Earlier, the world's leading sportswear producer and seller, planned to double its annual revenue in Greater China by 2015. From a technical view, the shares consolidated last week, but is still supported by a MT rising trend line. As long as $85 is not broken, expect a limited pullback before further advance to $90 and $92.5 in extension.

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


Corporate Calendar March 14th - March 18th

Date

Market

Company

Event

Monday, March 14th

 

UK

Essar Energy

annual results

 

SZ

Aryzta AG

1st-Half results

 

SZ

Partners Group

annual results

Tuesday, March 15th

 

IT

Enel

annual results

 

IT

Intesa Sanpaolo

annual results

 

UK

G4S Plc

annual results

 

UK

Close Brothers

1st-Half results

 

UK

Debenhams

1st-Half results

 

SZ

Lindt & Spruengli

annual results

Wednesday, March 16th

 

FR

Bourbon

annual results

 

GR

Opap

annual results

 

GE

Wacker Chemie

annual results

 

IT

Generali

annual results

 

UK

Hikma Pharmaceuticals

annual results

Thursday, March 17th

 

GE

Lanxess

annual results

 

GE

Porsche Pref

1st-Half results

 

GE

Deutsche Lufthansa

1st-Quarter results

 

UK

Legal & General

annual results

 

US

Fedex Corp

3rd-Quarter results

 

US

Nike

3rd-Quarter results

Friday, March 18th

 

UK

Aegis

annual results

 

PO

Brisa

annual results

 

US

Cintas

3rd-Quarter results


Economic Calendar (CET) March 14th - March 18th

Date

Market

Economic data

Period

Expected

Last

border=0 Monday, March 14th

11:00:00

EC

Euro-Zone: Industrial Production (MoM)

JAN

NA

0.3%

border=0 Tuesday, March 15th

07:30:00

FR

Consumer Price Index (MoM)

FEB

NA

-0.2%

11:00:00

GE

Zew Survey (Econ. Sentiment)

MAR

NA

15.7

11:00:00

GE

Zew Survey (Current Situation)

MAR

NA

85.2

13:30:00

US

Empire Manufacturing

MAR

15.9

15.4

15:00:00

US

NAHB Housing Market

MAR

17

16

19:15:00

US

Fed: Rates decision

 

NA

0.25%

border=0 Wednesday, March 16th

10:30:00

UK

Unemployment Rate (ILO)

JAN

NA

7.9%

11:00:00

EC

Euro-Zone: CPI (MoM)

FEB

NA

-0.7%

13:30:00

US

Producer Price Index (MoM)

FEB

0.6%

0.8%

13:30:00

US

Housing Starts (Thsd)

FEB

572

596

13:30:00

US

Bulding Permits (Thsd)

FEB

568

563

15:30:00

US

Crude Oil Inventories (WoW chg)

W10

NA

2516

border=0 Thursday, March 17th

13:30:00

US

Consumer Price Index (MoM)

FEB

0.4%

0.4%

13:30:00

US

CPI - Ex Food & Energy (MoM)

FEB

0.11%

0.2%

14:15:00

US

Industrial Production (MoM)

FEB

0.6%

-0.1%

14:15:00

US

Industrial Capacity Utilization

FEB

76.5%

76.1%

15:00:00

US

Philadelphia Fed.

MAR

29

35.9

15:00:00

US

Leading Indicators

FEB

0.9%

0.1%

border=0 Friday, March 18th

08:00:00

GE

Producer Price Index (MoM)

2Q

NA

1.2%

08:45:00

FR

Wages (QoQ)

1Q

NA

0.2%

10:00:00

EC

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

JAN

NA

-.1

11:00:00

EC

Euro-Zone: Trade Balance (Bln)

JAN

NA

-532.9

11:00:00

EC

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

JAN

NA

-532.9

INTERNAXX

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

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