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Market Outlook May 16th - May 20th PDF Print E-mail

 

Market Outlook

- WALL STREET:
US indices consolidated last week. On the economic data front, the University of Michigan preliminary consumer sentiment index rose to 72.4 (70.0 expected) in May. Also, the consumer-price index fell 0.4% in April as expected. Regarding sectors, diversified financials lost most by appx. 3.5%, while energy, materials, transportation and banks lost more than 1%, whereas food & staples retailing, house & personal products, utilities and consumer durables ended into positive territory. Technically, the S&P500 consolidates above its ST support. As long as 1319 holds on the downside, look for a limited rebound to 1370 at first.

- EUROPE:
In the UK, the FTSE 100 extended its loss by 0.85% last week. The index remains capped by 6100, and should post further weakness to 5817 and then to 5600. Looking at economic data released last week, UK trade deficit widened to £7.66B in March vs £7.5B expected, while UK industrial production gained 0.3% in March MoM vs -1.2% the month before and +0.8% expected. Halifax said UK house prices fell 1.4% in April MoM (+0.1% expected). Also, the British Retail Consortium said UK retail sales on like-for like basis surged 5.2% in April YoY, (vs +2.5% expected and -3.5% in March). In Europe, Euro-zone GDP climbed 0.8% in 1Q (+0.6% expected) after a 0.3% the quarter before. Euro-zone industrial production unexpectedly fell 0.2% in March MoM (+0.3% anticipated). Almost all stock markets in Europe closed into negative territory last week. The IBEX declined most by nearly 2.4%, followed by the DAX and the AEX lost more than 1% during the week. As for European sectors, basic resources, chemicals, oil & gas and insurance fell most by over 2%. On the other hand, health care (+2.76%), Media (+1.64%), travel & leisure (+1.5%) and food & beverage (+1.52%) posted the best performance. Graphically, the Stoxx 600 stands above 272, but failed to surpass 285, and the technical indicator seems to have lost its upside momentum, calling for caution.

  May 16th - May 20th

Market Round up

 

Weekly chg (%)

Last

Dow Jones

-.3

12595.8

Nasdaq 100

-.2

2379.2

Dax Xetra

-1.2

7403.3

Cac 40

-1

4018.9

Foreign Exchange

Euro/dollar: even though a continuation of the consolidation cannot be ruled out, its extent should be limited. LONG above 1.3800 towards 1.4900 & 1.5150.

Dollar/yen: the pair remains below a key resistance area which maintains downward pressure. SHORT below 85 with 79.50 or even 78.25 in sight.

Company preview

 Vodafone (GBp 167.55 ; -0.03% ; VOD ; VOD.L)
On Tuesday, Vodafone, the UK telecommunications giant, is expected to deliver FY pre-tax profit of £10.5B compared to around £8.7B a year earlier on sales of £45.6B vs £44.5B. Earlier, the group could consider an IPO of its Indian business, according to CEO Vittorio Colao. From a chartist view, the stock remains under pressure below its 20D MA, and should challenge its support at 166.5p in sight before a further pullback to 160p.

Wal-Mart (USD 55.72 ; 1.27% ; WMT ; WMT.N)
The same day in the US, Wal-Mart Stores may announce 1Q EPS of $0.95 compared with $0.88 a year ago on sales of appx. $103B vs $100B. Last week, the Co reached an agreement to acquire a minority stake in the holding company of Yihaodian, a fast-growing eCommerce company in China. Earlier, the Co planned to invest $755M to expand its operations in Brazil this year. Technically, the stock stands well above its ST bullish moving average. Above $54.5, look for a new rise towards $58.

 Hewlett Packard (USD 40.41 ; -0.98% ; HPQ ; HPQ.N)
On Wednesday, Hewlett-Packard Company could unveil 2Q EPS of $1.21 compared to $0.98 a year earlier on sales of $31.5B vs $30.8B, after the market close. Recently, the Co launched high-performance FlexNetwork solutions for video and mobile computing. Early this month, HP would open a new office in Tanzania. From a technical view, the stock is still trading within a ST range between $42 and $40, and may test the lower boundary in sight.

 Air France-KLM (EUR 12.195 ; -0.65% ; AF ; AIRF.PA)
Thursday, Air France-KLM is expected to release FY net income of E28M compared to a net loss of E1.5B a year ago on revenues of E23.7B vs around E21B. Recently, the Co announced a 23.1% YoY increase in traffic and 21.2% increase in capacity in April 2011. Earlier, the Co's price target was cut to E16 from E16.5 at Barclays. Graphically, the stock price is consolidating above its key horizontal level around E12. As long as this threshold remains as a support, a further up leg is more likely to E13 in the coming days.

 SABMiller (GBp 2249.5 ; 0.09% ; SAB ; SAB.L)
On the same day, in the UK, SabMiller may post FY pre-tax profit of $3.7B compared with $2.9B a year ago on revenues of $18.2B vs $14.2B. Early this month, the Co announced CFO Malcolm Wyman has confirmed his intention to retire at the end of August 2011. Malcolm will be replaced by James Wilson, currently Finance Director for SABMiller Europe. From a chartist view, the stock holds above its rising 50D MA and should challenge 2300p in sight before a new bounce to 2365p.

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


Corporate Calendar May 16th - May 20th

Date

Market

Company

Event

 Monday, May 16th

 

FR

Bouygues

1st-Quarter results

 

GE

Hochtief

1st-Quarter results

 

US

JC Penney

1st-Quarter results

 

US

Lowe's Cos

1st-Quarter results

 

US

Urban Outfitters

1st-Quarter results

 Tuesday, May 17th

 

UK

Babcock Intl Group Plc

annual results

 

UK

Vodafone

annual results

 

US

Wal-Mart

1st-Quarter results

 

US

Home Depot

1st-Quarter results

 

US

Analog Devices

2nd-Quarter results

 

US

Dell

1st-Quarter results

 Wednesday, May 18th

 

GE

Suedzucker

annual results

 

UK

Compass Group

1st-Half results

 

UK

ICAP

annual results

 

US

Hewlett Packard

2nd-Quarter results

 

US

Deere & Co

2nd-Quarter results

 

US

Staples

1st-Quarter results

 Thursday, May 19th

 

FR

Air France-KLM

annual results

 

SZ

Richemont

annual results

 

UK

Scottish & Southern Energy

annual results

 

UK

SABMiller

annual results

 

US

Sears Holdings

1st-Quarter results

 

US

Gap

1st-Quarter results

 Friday, May 20th

 

UK

Mitchells & Butlers

1st-Half results


Economic Calendar (CET) May 16th - May 20th

Date

Market

Economic data

Period

Expected

Last

 Monday, May 16th

11:00:00

EC

Euro-Zone: Trade Balance (Bln)

MAR

NA

-1480.6

11:00:00

EC

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

MAR

NA

-1480.6

11:00:00

EC

Euro-Zone: CPI (MoM)

APR

0.6%

1.4%

14:30:00

US

Empire Manufacturing

MAY

19.5

21.7

16:00:00

US

NAHB Housing Market

MAY

17

16

 Tuesday, May 17th

10:30:00

UK

CPI - EU Harmonised (MoM)

APR

0.7%

0.3%

11:00:00

GE

Zew Survey (Econ. Sentiment)

MAY

5.1

7.6

11:00:00

GE

Zew Survey (Current Situation)

MAY

87.3

87.1

14:30:00

US

Housing Starts (Thsd)

APR

564

549

14:30:00

US

Bulding Permits (Thsd)

APR

587

585

15:15:00

US

Industrial Production (MoM)

APR

0.25%

0.8%

 Wednesday, May 18th

10:30:00

UK

Unemployment Rate (ILO)

MAR

7.88%

7.8%

16:30:00

US

Crude Oil Inventories (WoW chg)

W19

NA

3781

 Thursday, May 19th

10:30:00

UK

Retail Sales (MoM)

APR

NA

0.2%

14:30:00

US

Initial Jobless Claims (Thsd)

W19

NA

434

16:00:00

US

Existing Home Sales (Mln)

APR

5.2

5.1

16:00:00

US

Philadelphia Fed.

MAY

20.8

18.5

16:00:00

US

Leading Indicators

APR

0.1%

0.4%

 Friday, May 20th

08:00:00

GE

Producer Price Index (MoM)

2Q

0.6%

0.4%

10:00:00

EC

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

MAR

NA

-9.5

16:00:00

EC

Euro-Zone: Consumer Confidence

APR

-11.8

-11.6


 

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

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