Market Outlook March 8th - March 12th Print

 

Market Outlook

- US : US indices jumped last week helped by better than expected economic data and optimism about stability in the Euro zone. Shares in the Auto (+8.33%), Media (+5.47%) and Materials (+5.29%) sectors led the rally. From a technical point of view the rise above 1030 has triggered a new upward acceleration that should lead the index to 1150, its last 52w high and a key level to break to target 1200. Only a break below 1097 (20d moving average) would reinstate the short term downside risk.

- EUROPE : European indices jumped more relative to the US helped by strong week on week gains in the Basic Resources (+9.89%), Auto (+8.98%) and Construction & Materials (+7.01%) sectors. On the STOXX 600, the index has broken above its strong resistance area at 254/255 and should extend its gains to 261.39, the last 52 week high. Only a break below 246 (20d moving average) would call for a larger consolidation.

March 8th - March 12th

Market Round up

 

Weekly chg (%)

Last

Dow Jones

2.3

10566.2

Nasdaq 100

3.8

1888.6

Dax Xetra

5

5877.4

Cac 40

5.4

3910.4

Foreign Exchange

Euro/dollar : The pair has rebounded on its support but remains under pressure as the RSI is capped by a declining trend line. SHORT below 1.4250 towards 1.34 & 1.30.

Dollar/yen : The pair is pulling back on its support ahead of a rebound. LONG @ 88 with 93.80 or even 97.50 in sight.

Company preview

Antofagasta (GBp 993 ; 12.39% ; ANTO ; ANTO.L)
On Tuesday, Antofagasta, a mining, transport and water company, is expected to report a FY pretax profit of appx. $1.4bln vs $2.6bln a year ago. Last week, the Co said that its Chilean mine resumed operations after being halted by the recent earthquake. The Co was also upgraded to "equal weight" from "underweight" at Barclays. Graphically, the upside breakout of 960p is a positive signal that has triggered a bullish acceleration. Moreover, the 20D MA is reversing up. As technical indicators do not show any reversal signs, the price looks set to make a run towards its previous high @ 1054p.

EADS (EUR 15.955 ; 5.28% ; EAD ; EAD.PA)
The same day, EADS, the aerospace and defence Co, could report FY09 sales of appx. E42.4bln vs E43.2bln a year ago and net income around E250m vs appx. E1.6bln a year ago. Last week, Airbus, its plane maker unit, said 67 planes were delivered in January and February 2010. On Thursday, the Co said India may need 1,030 new aircraft valued at appx. $138bln over the next twenty years. The Co was upgraded to "neutral" from "sell" at UBS. From a chartist point of view, the stock is clearly on the upside and should reach its key resistance threshold @ E16.56 (2009 high) where some profit taking may occur.

Kroger (USD 22.74 ; 2.9% ; KR ; KR.N)
Kroger, a retail food chain, may deliver a 4Q EPS of $0.34 compared to $0.28 a year ago on sales flat YoY to $17.7bln. Technically, the stock has filled its bearish gap and remains within a bullish channel. Since the 20D and 50D moving averages have reversed up, the bull camp seems to have the edge. Although, gains look fragile as technical indicators are close to their overbought area and the long term declining trend line may cap the current up move. Thus, only a breakout of the resistance line ($23) or either the lower boundary of the bullish channel ($21.5) will set the direction of the next move.

E.ON (EUR 26.87 ; 2.73% ; EOAN ; EONG.DE)
On Wednesday, E.ON is expected to deliver a FY net income of appx. E5.7bln vs E1.7bln a year ago (bef-mkt). Last month, the Co said it has no plan to expand in the French energy market arguing that no competition was possible as prices are essentially regulated by the state. From a chartist point of view, the price pushed above a declining trend line. As long as the stock remains above its key MT support threshold @ 25.55, we favour a bounce towards E27.6 and even E29.

Brown Forman (B) (USD 55.51 ; 6.02% ; BF/B ; BFb.N)
The same day, Brown Forman, a Co in the vine and spirits business, may report a 3Q EPS of $0.7 vs $1 a year ago (bef-mkt). Last month, the Board of Directors declared a regular quarterly cash dividend of $0.30 per share on its class A and class B common stock. Recently, Brown-Forman was added to the S&P 500 Dividend Aristocrats Index set by Standard & Poor's as the Co has paid regular quarterly cash dividends for 64 consecutive years. From a technical point of view, the stock jumped last week towards its previous yearly high. The rising 20d and 50d moving averages call for a new test of $55.55. Only a breakout of this level would initiate a new up leg towards $58.

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


Corporate Calendar March 8th - March 12th

Date

Market

Company

Event

Monday, March 8th

 

 

UK

Intertek Group

annual results

 

UK

Petrofac Ltd

annual results

 

US

H&R Block

2nd-Quarter results

Tuesday, March 9th

 

 

FR

EADS

annual results

 

GE

Deutsche Post

annual results

 

UK

Liberty International

annual results

 

UK

Inmarsat

annual results

 

UK

Antofagasta

annual results

 

US

Kroger

1st-Quarter results

Wednesday, March 10th

 

 

BE

Fortis

annual results

 

FR

JC Decaux

annual results

 

FR

Lagardère

annual results

 

GE

E.ON

annual results

 

IT

Pirelli & C

annual results

 

UK

Tullow Oil

annual results

Thursday, March 11th

 

 

BE

Delhaize Group

annual results

 

GE

Hannover Re

annual results

 

GE

K+S

annual results

 

UK

Morrison Supermarkets

annual results

 

UK

Old Mutual

annual results

 

US

Pall

1st-Quarter results

 Friday, March 12th

 

 

NE

VOPAK

annual results


Economic Calendar (CET) March 8th - March 12th

Date

Market

Economic data

Period

Expected

Last

Monday, March 8th

 

   

No major economic data expected

 

Tuesday, March 9th

 

   

No major economic data expected

     

Wednesday, March 10th

 

16:00:00

US

Wholesale Inventories

JAN

0.2%

-0.8%

16:30:00

US

Crude Oil Inventories (WoW chg)

W9

NA

4034

20:00:00

US

Monthly Budget Satement (Bln)

FEB

-196.754

-42.634

Thursday, March 11th

 

14:30:00

US

Trade Balance (Bln)

JAN

-40.626

-40.181

14:30:00

US

Initial Jobless Claims (Thsd)

W9

NA

469

Friday, March 12th

 

14:30:00

US

Retail Sales

FEB

-0.1%

0.5%

14:30:00

US

Retail Sales less Autos

FEB

0.1%

0.6%

15:55:00

US

U. of Michigan Confidence

FEB

73.8

73.6

16:00:00

US

Business Inventories

JAN

0.2%

-0.2%


 


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