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Market Outlook May 30th - June 3rd PDF Print E-mail

 

Market Outlook

- WALL STREET:
US indices extended their decline last week.On the economic data front, GDP for 1Q was +1.8% vs +2.2% expected by economists. Durable good orders dropped 3.6% in April MoM (-2.5% expected) after a jump of 4.4% the month before. University of Michigan confidence rose to 74.3 in May in final estimation vs 72.4 previously. Regarding sectors, health care equipment lost most by over 2%, followed by semiconductors (-1.94%) and utilities (-1.65%), whereas materials and real estate, banks closed into positive territory during the week.Technically, the S&P500 index remains under pressure below its 20D MA, and may post further weakness to 1296 and 1255.

- EUROPE:
In the UK, the FTSE 100 closed almost flat last week. GfK consumer confidence survey jumped to -21 in May, its biggest increase in April, vs -31 the month before and anticipated by economists. GDP growth was confirmed at 0.5% for the first quarter. CBI reported sales index was 18 in May vs 21 in April and 11 expected by consensus. It is the first drop of the index since three months. From a chartis view, below 6100, expect a return to 5800 and then to 5600.In Europe, euro zone business climate indicator fell to 0.99 in may vs 1.28 the month before and 1.20 expected by economists. Almost all stock markets in Europe ended into negative territory last week. The FTSE MIB and the DAX declined most by 1.91% and 1.42%, respectively, while the CAC fell by 1% and the AEX lost 0.63% during the week.As for European sectors, technology (-2.35%), media (-1.68%) and telecommunications (-1.47%) sectors lost ground during the week. On the other hand, basic resources, health care, banks and retail closed into positive territory last week.From a technical view, the Stoxx 600 is pulling back to its support at 272 ahead of a new bounce to 285 at first.

 

  May 30th - June 3rd

Market Round up

 

Weekly chg (%)

Last

Dow Jones

-.6

12441.6

Nasdaq 100

-.7

2336.1

Dax Xetra

-1.4

7163.5

Cac 40

-1

3951

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 1.4550 & 1.49.

Dollar/yen : the pair is shaping a bearish flag and should face further weakness as the RSI is badly directed. SHORT below 84 with 79.50 or even 78.25 in sight.

Company preview

 Northumbrian Water (GBp 362.3 ; 0.22% ; NWG ; NWG.L)
On Wednesday, Northumbrian Water Group, the UK utility company, is expected to release FY pre-tax profit of around £177M compared to £170M a year ago on revenues of £740M vs £705M. Recently, the stock was downgraded to "neutral" from "overweight" at JPMorgan. From a technical view, the stock is now challenging its YTD high at 365p. The upside breakout of this threshold will probably open the way to 385p and 400p in extension.

Wolseley (GBp 1991 ; -1.97% ; WOS ; WOS.L)
The same day, Wolseley, the building materials and lumber products supplier, could announce 2H pre-tax profit of £276M vs a loss before tax of £67M last year on revenues of appx. £6.9B, almost in line with last year. Recently, the Co planned to sell three of its UK units for an expected £300M, according to Times. Earlier, the Co was downgraded to "hold" from "buy" at Deutsche Bank. Technically, the stock remains under pressure below its bearish ST moving average, and may post further downsides towards 1835p.

Johnson Matthey (GBp 2025 ; 0.85% ; JMAT ; JMAT.L)
On Thursday, Johnson Matthey, a specialty chemicals company, is expected to deliver FY pre-tax profit of £329M compared with £229M a year ago on revenues of appx. £9.2B vs £7.8B. Earlier, the Co's price target was raised to 2625p from 2540p at Goldman Sachs ("buy" rating unchanged). From a chartist view, the stock is well oriented, supported by both the 20D and 50D MAs. Further advance is more likely to challenge 2100p in sight, as long as 1950p is not broken.

Joy Global (USD 89.2 ; -1.27% ; JOYG ; JOYG.O)
The same day in the US, Joy Global may post 2Q EPS of around $1.35 compared with $1.15 a year ago on sales of $1B vs $896M. last week, the high-productivity mining solutions company declared a quarterly dividend in the amount of $0.175 per share to be paid on June 20, 2011 to shareholders of record on June 6, 2011. From a technical view, the stock is still capped by its 20D MA, which has already reversed down and should push the price lower towards $82.

SAIC Inc (USD 17.27 ; -1.37% ; SAI ; SAI.N)
Thursday, SAIC Inc could report 1Q EPS of around $0.33 (almost unchanged YoY) on sales of $2.7B (in line with last year), after the market close. A week ago, the Co won a prime contract by the U.S. Air Force to provide fighter operational test and evaluation services valued at $85M with all options. Technically, the share price consolidates above its key support at $17, and is expected to re-test 17.50 in the coming days.

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


Corporate Calendar May 30th - June 3rd

Date

Market

Company

Event

Monday, May 30th

   

No major earnings expected

 

Tuesday, May 31st

 

AS

Voestalpine

annual results

Wednesday, June 1st

 

UK

Intermediate Capital Group

annual results

 

UK

Northumbrian Water

annual results

 

UK

Wolseley

2nd-Half results

Thursday, June 2nd

 

UK

Johnson Matthey

annual results

 

US

Joy Global

2nd-Quarter results

 

US

SAIC Inc

1st-Quarter results

 Friday, June 3rd

   

No major earnings expected

 


Economic Calendar (CET) May 30th - June 3rd

Date

Market

Economic data

Period

Expected

Last

Monday, May 30th

   

No major economic data expected

     

Tuesday, May 31st

08:00:00

GE

Retail Sales (MoM)

2Q

1.7%

-2.7%

08:45:00

FR

Consumer Spending (MoM)

APR

-0.3%

-0.7%

09:55:00

GE

Unemployment Change (Thsd)

MAY

-30.7

-37

09:55:00

GE

Unemployment Rate

MAY

7%

7.1%

15:45:00

US

Chicago Purchasing Manager Index

MAY

61.8

67.6

16:00:00

US

Consumer Confidence

MAY

66.44

65.4

Wednesday, June 1st

07:30:00

FR

Unemployment Change (Thsd) (QoQ)

1Q

NA

-49

10:30:00

UK

M4 Money Supply (MoM)

APR

NA

0.1%

10:30:00

UK

Net Consumer Credit (Mln)

APR

0.272

0.1

16:00:00

US

Construction Spending (MoM)

APR

0.2%

1.4%

16:00:00

US

ISM - Manufacturing

MAY

57.6

60.4

23:00:00

US

Total Vehicule Sales (Mln)

MAY

12.72

13.14

Thursday, June 2nd

14:30:00

US

Initial Jobless Claims (Thsd)

W21

421

424

14:30:00

US

Nonfarm Productivity

1Q

1.7%

1.6%

14:30:00

US

Unit Labor Costs

1Q

0.7%

1%

16:00:00

US

Factory Orders

APR

-0.9%

3.4%

16:30:00

US

Crude Oil Inventories (WoW chg)

W21

NA

616

Friday, June 3rd

14:30:00

US

Unemployment Rate

MAY

8.9%

9%

14:30:00

US

Change in Nonfarm Payrolls (Thsd)

MAY

189.02

244

14:30:00

US

Change in Manufact. Payrolls (Thsd)

MAY

16

29

16:00:00

US

ISM - Non Manufacturing

MAY

54

52.8


 


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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