Market Outlook May 17th - May 21st Print

Market Outlook

- US : US indices bounced WoW but trading remained volatile as the economic situation in Europe remains a cause for concern. The gain was driven by shares in the Auto (+4.93%), Cons. Durables (+4.69%) and Capital Goods (+3.9%) sectors. Shares in the Diversified Financials (-0.05%) and Pharma. & Bio. (-0.39%) sectors even posted a modest WoW decline. From a technical point of view on the S&P 500, daily indicators are now down. Below 1178 (last week's high) - 1184 (former support now resistance) the risk is for further slide to 1050 and then 1020. Expect large daily swings to prevail in the days ahead.

- EUROPE : European rose WoW despite another sharp decline on Friday as last Monday's rally (>10% in some cases) helped show a gain on the week. Stocks in the Auto (+8.62%), Insurance (+8.14%) and Industrial Goods & Services (+7.12%) jumped most. On the STOXX 600, the 263/261 area should keep the downside pressure intact in the days ahead. Daily indicators are down and call for further slide to 240 and even 234.6 (key to avoid a new down leg to 220). Volatility should remain high as investors focus on political action rather than economic or corporate data.

 

May 17th - May 21st

Market Round up

 

Weekly chg (%)

Last

Dow Jones

2.3

10620.2

Nasdaq 100

3.1

1907.1

Dax Xetra

.6

6056.7

Cac 40

-4.6

3550.4

border=0 Foreign Exchange

Euro/dollar : The pair has broken below a bearish channel lower boundary and is approaching its previous low. SHORT below 1.3250 towards 1.25 & 1.23.

Dollar/yen : The pair has rebounded on its support as the RSI is turning up. LONG @ 91.70 with 95.60 or even 97.50 in sight.

 

 

Company preview

Hewlett Packard (USD 47.43 ; 1.5% ; HPQ ; HPQ.N)
On Tuesday, Hewlett-Packard is expected to report 2Q EPS of around $1 compared to $0.86 a year ago on sales of $29.8bln vs $27.3bln. Recently, the Co agreed to buy Palm Inc, a smartphone marker for $1.2bln. From a technical view, the stock remains under pressure below a ST declining trend line. Below $50, look for a further pullback to $46.2 and $45 in extension.

Wal-Mart (USD 52.12 ; -0.53% ; WMT ; WMT.N)
The same day, Wal-Mart Stores may deliver 1Q EPS of appx. $0.85 vs $0.77 a year earlier on sales of $98.4bln vs $94.2bln. Last week, the US's April retail sales rose 0.4% vs an appx. 0.2% increase expected. The Co's price target was cut to $63 from $65 at Citigroup with a "buy" rating unchanged. Technically, the stock is currently consolidating but is well supported by a MT major level around $52. As long as this level holds on the downside, a further rebound is more likely to $53.5 and $54.

Air France-KLM (EUR 9.991 ; -5.66% ; AF ; AIRF.PA)
Wednesday, Air France-KLM could release a FY net loss of E1.1bln compared with a loss of E814m a year ago on revenues of appx. E21bln vs E24bln. A week ago, the Co reported April passenger traffic down 15.9% YoY in April, hurt by disruption caused by volcanic ash. Graphically, the stock is still trading within its MT range between E13 and E9.5 and may test the lower boundary at first.

Target (USD 55.17 ; 1.6% ; TGT ; TGT.N)
The same day, Target is expected to announce 1Q EPS of $0.87 vs $0.69 a year earlier on sales of $15.6bln vs $14.8bln. Recently, the Co's price target was raised to $79 from $64 at Citigroup. The stock consolidates in the short term but the bias remains bullish in the medium term. Above $53, a further up move remains in the cards with $58.5 as target (last 52w high).

SABMiller (GBp 1994 ; 0.5% ; SAB ; SAB.J)
On Thursday, SABMiller could unveil FY pre-tax profit of $3.3bln vs $2.96bln a year ago on revenues of $19.4bln vs around $14.9bln. Recently, the Co said it planned to invest $34m to build a new plant in Namibia. Technically, the stock stands well above the 50D MA and may test its nearest resistance at 2090p. If breakout it, a further rise should occur towards 2200p. The 1900p level must hold to remain positive on the stock.

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


Corporate Calendar May 17th - May 21st

Date

Market

Company

Event

Monday, May 17th

 

GR

Titan Cement

1st-Quarter results

 

GE

Hochtief

1st-Quarter results

 

UK

Mitie Group

annual results

 

US

Lowe's Cos

2nd-Quarter results

 

US

Agilent Technologies

2nd-Quarter results

Tuesday, May 18th

 

UK

Vodafone

annual results

 

US

Abercrombie & Fitch

2nd-Quarter results

 

US

Hewlett Packard

2nd-Quarter results

 

US

Home Depot

2nd-Quarter results

 

US

Wal-Mart

1st-Quarter results

 

US

TJX Companies

2nd-Quarter results

border=0 Wednesday, May 19th

 

FR

Air France-KLM

annual results

 

GR

Public Power Corp

1st-Quarter results

 

US

Target

1st-Quarter results

 

US

Limited Brands

2nd-Quarter results

 

US

Deere & Co

2nd-Quarter results

 

US

Applied Materials

2nd-Quarter results

Thursday, May 20th

 

UK

National Grid Transco

annual results

 

UK

SABMiller

annual results

 

US

Salesforce.com

2nd-Quarter results

 

US

Staples

2nd-Quarter results

 

US

Intuit

2nd-Quarter results

 

US

Dell Computer

2nd-Quarter results

Friday, May 21st

 

UK

British Land

annual results

 

UK

United Utilities

annual results

 

UK

British Airways

annual results

 

UK

London Stock Exchange

annual results

 

US

Sears Holdings

1st-Quarter results

 

US

Gap

2nd-Quarter results


Economic Calendar (CET) May 17th - May 21st

Date

Market

Economic data

Period

Expected

Last

Monday, May 17th

14:30:00

US

Empire Manufacturing

MAY

29.5

31.9

19:00:00

US

NAHB Housing Market

MAY

20

19

border=0 Tuesday, May 18th

11:00:00

EC

Euro-Zone: Trade Balance (Bln)

MAR

NA

2647.6

11:00:00

GE

Zew Survey (Econ. Sentiment)

MAY

46.6

53

11:00:00

GE

Zew Survey (Current Situation)

MAY

-32.8

-39.2

14:30:00

US

Producer Price Index (MoM)

APR

0.1%

0.7%

14:30:00

US

Housing Starts (Thsd)

APR

654

626

14:30:00

US

Bulding Permits (Thsd)

APR

676

680

Wednesday, May 19th

14:30:00

US

Consumer Price Index (MoM)

APR

0.1%

0.1%

14:30:00

US

CPI - Ex Food & Energy (MoM)

APR

0.1%

0%

16:30:00

US

Crude Oil Inventories (WoW chg)

W19

NA

1949

Thursday, May 20th

08:00:00

GE

Producer Price Index (MoM)

APR

0.5%

0.7%

10:30:00

UK

Retail Sales (MoM)

APR

NA

0.2%

14:30:00

US

Initial Jobless Claims (Thsd)

W19

NA

444

16:00:00

EC

Euro-Zone: Consumer Confidence

MAY

NA

-15

16:00:00

US

Philadelphia Fed.

MAY

21

20.2

16:00:00

US

Leading Indicators

APR

0.2%

1.4%

Friday, May 21st

10:00:00

GE

IFO - Business Climate

MAY

101.5

101.6

10:00:00

GE

IFO - Current Assessment

MAY

100.1

99.3

10:00:00

EC

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

MAR

NA

-5.2

10:00:00

GE

IFO - Expectations

MAY

103.2

104

10:30:00

UK

Public Finances (PSNCR) (Bln)

APR

NA

25.752001

10:30:00

UK

M4 Money Supply (MoM)

APR

NA

0.2%