Market Outlook May 3rd - May 7th Print

Market Outlook

- US : US indices retreated last week despite better than expected corporate results on concern about further probe about Goldman Sachs and a lower than expected 1Q GDP report. Shares in the Semiconductors (-4.94%), Diversified Financials (-4.98%) and Auto (-6.38%) sectors fell most. From a technical point of view on the S&P, the 1183.7 support is key to hold to avoid a larger consolidation, for the days ahead above 1183.7 the targets remain at 1200 & 1220. Otherwise, the risk will be 1160 and 1150. The configuration calls for caution around the current level.

- EUROPE : European markets fell as investors remain worried about a potential contagion of Greece's trouble to other European countries. Shares in the Oil & Gas (-3.98%), Insurance (-4.03%) and Basic Resources (-4.56%) sectors fell most. On the STOXX 600, the break of 263 has tarnished the outlook and a consolidation to 255 and 250 seems likely. Only a quick rise above 270 would resume the up trend.

May 3rd - May 7th

Market Round up

 

Weekly chg (%)

Last

Dow Jones

-1.7

11008.6

Nasdaq 100

-2.7

2000.6

Dax Xetra

-2

6135.7

Cac 40

-3.4

3817

border=0 Foreign Exchange

Euro/dollar : The pair remains within a bearish channel and is approaching its next support. SHORT below 1.38 towards 1.30 & 1.25.

Dollar/yen : The pair RSI is supported by a rising trend line, the pair remains within a bullish channel. LONG @ 90.30 with 95.60 or even 97.50 in sight.

 

Company preview

Alstom (EUR 44.48 ; -3.05% ; ALO ; ALSO.PA)
Tuesday, Alstom may post FY net income of E1.2bln compared to E1.1bln a year earlier on revenue of E18.7bln vs E19.7bln. Recently, the Co won $25m traction transformer order in France. The Co was upgraded to "hold" from "sell" at Societe Generale. Technically, the stock remains under pressure below the key resistance zone around E46. A further pullback is therefore expected to E42 and E40 in extension.

UBS (CHF 16.87 ; -1.63% ; UBSN ; UBSN.VX)
The same day, UBS is expected to deliver 1Q adjusted net income of SF1.95bln compared with a net loss of E1.97bln last year. A week ago, the Co agreed to acquire Link Investimentos, a Brazilian brokerage firm for about $112m. From a technical view, the shares are consolidating above the 50D MA. As long as SF16 remains as a support, we keep our ST bullish view unchanged and see a further bounce towards SF18.5.

BMW (EUR 37.13 ; -0.4% ; BMW ; BMWG.DE)
On Wednesday, BMW could announce 1Q net income of appx. E280m vs a loss of E153m a year earlier on revenue of E12.6bln vs E11.5bln. Earlier, BMW increased its FY 2010 China sales target to 120,000 units from 100,000 units previously estimated. In addition, the stock was upgraded to "buy" from "add" at Natixis. Technically, the stock remains positively oriented above its 20D MA. Above E35, a further rise is more likely towards E40 in the forthcoming weeks.

Lafarge (EUR 55 ; -3.76% ; LG ; LAFP.PA)
On the same day, Lafarge, a wide range of building materials producer, is expected to report its 1Q results vs a 1Q 2009 loss of E17m and sales of E3.6bln. The Co's price target was increased to E57 from E55 at BofA-ML with a "neutral" recommendation unchanged. Graphically, the stock is still capped by a MT declining trend line. Hence, below E58.5, a further pullback is highly expected to 50 and even to E46.5 (the last swing low).

Royal Bank Of Scotland Group (GBp 54.35 ; -2.6% ; RBS ; RBS.L)
Friday, Royal Bank of Scotland Group is expected to unveil a 1Q loss compared to a loss of £788m a year ago. Recently, the Co's price target was raised to 75p vs 50p at HSBC with an "overweight" rating unchanged. From a chartist view, the bias remains bullish but the price is now close to its MT resistance. We expect a test of 58p in sight before a further up move to 62p at first.

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

Corporate Calendar May 3rd - May 7th

Date

Market

Company

Event

Monday, May 3rd

 

NE

TNT

1st-Quarter results

 

US

McKesson

2nd-Quarter results

 

US

Sysco

2nd-Quarter results

 

US

Northeast Utilities

2nd-Quarter results

 

US

Loews Corp

2nd-Quarter results

 

US

Vulcan Materials

2nd-Quarter results

Tuesday, May 4th

 

FR

Alstom

annual results

 

US

News Corp

2nd-Quarter results

 

US

Mastercard Inc

2nd-Quarter results

 

US

NYSE Euronext

1st-Quarter results

 

SZ

Holcim

1st-Quarter results

 

SZ

UBS

1st-Quarter results

Wednesday, May 5th

 

BE

Groupe Bruxelles Lambert

1st-Quarter results

 

BE

Anheuser-Busch InBev

1st-Quarter results

 

FR

CGG-Veritas

1st-Quarter results

 

FR

Lafarge

1st-Quarter results

 

GE

Henkel

1st-Quarter results

 

GE

BMW

1st-Quarter results

Thursday, May 6th

 

FR

Axa

1st-Quarter results

 

GE

Beiersdorf

1st-Quarter results

 

GE

Heidelbergcement

1st-Quarter results

 

UK

Vedanta Resources

annual results

 

US

Kraft Foods

2nd-Quarter results

 

SZ

Adecco

1st-Quarter results

Friday, May 7th

 

GE

MunichRe

1st-Quarter results

 

UK

Royal Bank Of Scotland Group

1st-Quarter results

 

SP

Sacyr Vallehermoso

1st-Quarter results

 

US

CF Industries

2nd-Quarter results

 

US

Berkshire Hathaway

2nd-Quarter results

 

US

AIG

2nd-Quarter results


Economic Calendar (CET) May 3rd - May 7th

Date

Market

Economic data

Period

Expected

Last

Monday, May 3rd

14:30:00

US

Personal Income

MAR

0.3%

0%

14:30:00

US

Personal Spending

MAR

0.7%

0.3%

16:00:00

US

Construction Spending (MoM)

MAR

-0.3%

-1.3%

16:00:00

US

ISM - Manufacturing

APR

59.5

59.6

16:00:00

US

ISM - Price Paid

APR

73.2

75

23:00:00

US

Total Vehicule Sales (Mln)

APR

11.54

11.77

Tuesday, May 4th

16:00:00

US

Factory Orders

MAR

-0.1%

0.6%

Wednesday, May 5th

16:00:00

US

ISM - Non Manufacturing

APR

55.9

55.4

16:30:00

US

Crude Oil Inventories (WoW chg)

W17

NA

1963

Thursday, May 6th

14:30:00

US

Initial Jobless Claims (Thsd)

W17

444.4

448

14:30:00

US

Nonfarm Productivity

1Q

2.2%

6.9%

14:30:00

US

Unit Labor Costs

1Q

-0.4%

-5.9%

Friday, May 7th

14:30:00

US

Unemployment Rate

APR

9.7%

9.7%

14:30:00

US

Change in Nonfarm Payrolls (Thsd)

APR

176.73

162

14:30:00

US

Change in Manufact. Payrolls (Thsd)

APR

14

17

21:00:00

US

Consumer Credit (Bln)

MAR

-1.468

-11.512