Market Outlook May 31st - June 4th Print

Market Outlook

- US : US indices were mixed last week, the Dow Jones fell 0.56% while the S&P 500 gained just 0.16% and the Nasdaq 100 gained 1.6%. Stocks in Media (+2.9%), Auto (+2.69%) and Cons. Durables (+2.37%) traded up while shares in the Food, Beverage & Tobacco (-1.09%), House. & Personal Prod. (-1.28%) and Banks (-2.64%) sectors remained under pressure. The US market will be closed Monday. From a technical point of view on the S&P 500: daily indicators are down. Below 1150, the risk is for further slide to 1050 and then 1020. Expect large daily swings to prevail in the days ahead. Alternatively, a rise above 1150 would open the way to 1178 - 1184 (former support now resistance).

- EUROPE : European markets rose WoW except in Italy where the FTSE MIB fell about 0.3 percent. Stocks in the Basic Resources (+7.44%), Telecommunications (+4.22%) and Retail (+4.2%) sectors rose most. Fitch downgraded Spain's debt rating to AA+ from AAA on Friday after the European close. The UK will be closed Monday. On the STOXX 600, the 253 level should keep the downside pressure intact in the days ahead. Daily indicators are down and call for further slide to 230 and even 224. Volatility should remain high as investors remain cautious about the deficit and debt crisis in the euro zone.

May 31st - June 4th

 

Market Round up

 

Weekly chg (%)

Last

Dow Jones

-.6

10136.6

Nasdaq 100

1.6

1852.4

Dax Xetra

2

5946.2

Cac 40

2.5

3515.1

Foreign Exchange

Euro/dollar : The pair has broken below its previous low, the RSI is on the downside. SHORT below 1.30 towards 1.20 & 1.1750.

Dollar/yen : The pair is under pressure and is challenging its channel lower boundary. SHORT @ 94 with 87.50 or even 85 in sight.

 

Company preview

Bouygues (EUR 34.47 ; 4.96% ; EN ; BOUY.PA)
On Tuesday, Bouygues is expected to announce 1Q net income of appx. E145m compared to E159m a year earlier on revenues of E6.3bln vs E6.65bln. Recently, the Co won a Canadian police headquarters contract worth E450m. Technically, the stock escaped on the upside from a MT declining trend line. A further rebound should be in sight towards E36.5 and E38 in extension.

Ryanair (EUR 3.29 ; 6.54% ; RYA ; RYA.I)
The same day, Ryanair, a low fare passenger airline services company, may release FY net income of around E320m vs a loss of E169m a year earlier on sales of E2.9bln vs E2.94bln. Last week, the Co said it planned to open its Barcelona base in September. From a technical view, the stock price is close to a MT critical threshold at E3.40. A test is therefore expected in the coming days before any further upsides to E3.6.

Northumbrian Water (GBp 277.5 ; 2.78% ; NWG ; NWG.L)
On Wednesday, Northumbrian Water, the UK utilities company, could unveil FY pre-tax profit of £165m compared to £152.7m last year. Earlier, the Co's price target was raised to 268p vs 242p at Goldman Sachs yet with a "sell" rating unchanged. From a technical point of view, the stock continued its upside last week and is now challenging a key level at 280p. Hence, a ST consolidation cannot be ruled out before a new leg up to 290p.

Ahold (EUR 10.275 ; 1.93% ; AH ; AH.AS)
On Thursday, Ahold is expected to deliver 1Q net income of E270m compared with E196m last year on revenues of E8.7bln, almost unchanged YoY. A week ago, the Co's price target was increased to E12.20 from E11.8 at RBS with a "buy" recommendation unchanged. Graphically, the price continues to consolidate above its 20D & 50D MA. Above E9.8, look for a further rise to E10.50 and then to 10.8.

Johnson Matthey (GBp 1533 ; 0% ; JMAT ; JMAT.L)
The same day, Johnson Matthey, a specialty chemicals company, may report FY pre-tax profit of appx. £250m compared to £174m a year ago on revenues of £7.6bln vs £7.85bln. The stock price target was raised to 1400p from 1380p at UBS last week but still remains at "sell". Technically, the stock bounced off from its 1455 support recently. Nevertheless, the upside potential should be limited below 1650, since the stock is still capped by its bearish 20D MA.

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


Corporate Calendar May 31st - June 4th

Date

Market

Company

Event

Monday, May 31st

   

No major corporate results expected

 

Tuesday, June 1st

 

AS

Voestalpine

annual results

 

FR

Bouygues

1st-Quarter results

 

IR

Ryanair

annual results

Wednesday, June 2nd

 

UK

Intermediate Capital Group

annual results

 

UK

Northumbrian Water

annual results

Thursday, June 3rd

 

UK

VT Group

annual results

 

UK

Johnson Matthey

annual results

 

NE

Ahold

1st-Quarter results

 

US

SAIC Inc

2nd-Quarter results

Friday, June 4th

   

No major corporate results expected

 

Economic Calendar (CET) May 31st - June 4th

Date

Market

Economic data

Period

Expected

Last

Monday, May 31st

10:00:00

EC

Euro-zone: M3 (3 mth ave.)

APR

NA

-0.1%

11:00:00

EC

Euro-zone: Industrial Confidence

MAY

NA

-7.3

11:00:00

EC

Euro-Zone: Consumer Confidence

JUN

NA

-17.5

11:00:00

EC

Business Climate Indicator

MAY

NA

.23

11:00:00

EC

Euro-Zone: Economic Confidence

MAY

NA

100.6

Tuesday, June 1st

09:55:00

GE

Unemployment Change (Thsd)

MAY

NA

-68

09:55:00

GE

Unemployment Rate

MAY

NA

7.8%

11:00:00

EC

Euro-Zone: Unemployment Rate

APR

NA

10%

16:00:00

US

Construction Spending (MoM)

APR

0.1%

0.2%

16:00:00

US

ISM - Manufacturing

MAY

59.5

60.4

16:00:00

US

ISM - Price Paid

MAY

71.3

78

Wednesday, June 2nd

10:30:00

UK

M4 Money Supply (MoM)

MAY

NA

0%

10:30:00

UK

Net Consumer Credit (Mln)

APR

NA

.3

11:00:00

EC

Euro-Zone: PPI (MoM)

APR

NA

0.6%

23:00:00

US

Total Vehicule Sales (Mln)

MAY

11.42

11.21

23:00:00

US

Domestic Vehicule Sales (Mln)

MAY

8.86

8.78

Thursday, June 3rd

11:00:00

EC

Euro-Zone: Retail Trade (MoM)

APR

NA

0%

14:30:00

US

Nonfarm Productivity

2Q

3.8%

3.6%

14:30:00

US

Unit Labor Costs

2Q

-1.4%

-1.6%

16:00:00

US

Factory Orders

APR

1.5%

1.1%

16:00:00

US

ISM - Non Manufacturing

MAY

55.7

55.4

17:00:00

US

Crude Oil Inventories (WoW chg)

W21

NA

2460

Friday, June 4th

11:00:00

EC

Euro-Zone: GDP (QoQ)

1Q

NA

0.2%

14:30:00

US

Unemployment Rate

MAY

9.8%

9.9%

14:30:00

US

Change in Nonfarm Payrolls (Thsd)

MAY

463.23

290

14:30:00

US

Change in Manufact. Payrolls (Thsd)

MAY

30

44