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Market Outlook November 1st - November 5th PDF Print E-mail

Market Outlook

- WALL STREET:
In the UK, the FTSE 100 ended the week in the negative territory and was among the worst performing European indices. This happened despite a positive start after Tuesday release of a 3Q GDP growth QoQ at 0.8%: twice higher than expected (vs 1.2% in 2Q). In addition, S&P confirmed the country AAA rating with a stable outlook. However, the banks sector decline and the 5800 key area which offered a strong resistance while the RSI drew a bearish divergence maintained a downside pressure. As a consequence, a limited consolidation towards 5540 & 5430 is expected in the coming days. In Europe, equity indices ended the week in the red, with the OMX declining the most whereas, the DAX & the SMI ended almost flat. October Euro-zone Economic Confidence rose to 104.1 (103.5 expected) from 103.2 in September but unemployment rate rose to 10.1% from 10%. Regarding sectors, telecom and utilities rose more than 2% whereas, banks fell by more than 2%. From a technical point of view, further advance can be expected on the Stoxx 600 with Aprils high (272.5) as next up target.

- EUROPE:

US indices ended the week flat except for the Nasdaq 100 sustained by weekly sectors gains above 2% in software, semiconductors and media. On the opposite, commercial and insurance stocks declined more than 2% and pounded the Dow Jones and the S&P 500. On the economic front, 3Q GDP grew 2%, in line with expectations vs +1.7% for 2Q. Personal Consumption rose 2.6% (2.5% expected) vs 2.2% in 2Q. GDP Price Index rose 2.3% (1.8% expected) vs 1.9% in 2Q whereas, Core PCE rose 0.8% QoQ (+1% expected). Weekly jobless claims fell to 434k (450k expected) from 455k the week before (revised higher from 452k). The market is now waiting for Nov 3 Fed decision, with a broad expectation for further quantitative easing (QE). From a technical point of view, the Dow Jones and the S&P 500 are supported by their 20-day moving averages while on the Nasdaq 100, the 2050 former key resistance is now acting as a strong support.

  November 1st - November 5th

Market Round up

 

Weekly chg (%)

Last

Dow Jones

-0.4

11124.6

Nasdaq 100

0.7

2128.4

Dax Xetra

0

6613.2

Cac 40

-0.4

3837.3

Foreign Exchange

Euro/dollar : the pair remains on the upside and is challenging its resistance. LONG above 1.33 towards 1.4050 & 1.4250.

Dollar/yen : the pair is posting a rebound but remains within a MT bearish channel. SHORT @ 83.8 with 80.50 or even 79 in sight.

 

Company preview

BP (GBp 430.1 ; 0.88% ; BP/ ; BP.L)
On Tuesday, BP is expected to publish 3Q pre-tax profit of around $7bln compared with 7.6bln a year ago. Last week, the Co was in talks with Sinopec about jointly developing shale gas fields in China, according to WSJ's report. Earlier, the Co sold its interests in four deepwater Gulf of Mexico oil and gas fields for $650m. Technically, the stock still remains under pressure below its key resistance at 450, which represents the bearish gap on June 1st 2010. Below this level, look for a new leg down to 400p at first.

BMW (EUR 52.39 ; 3.87% ; BMW ; BMWG.DE)
On Wednesday, BMW could release 3Q net income of E821m compared to E76m a year earlier on sales of E14.2bln vs E11.8bln. A week ago, the Co planned to invest over E100m to expand its Leipzig plant. Recently, BMW announced to recall about 151,000 vehicles in the US due to fuel-pump defects. From a technical point of view, the stock rebounded strongly last Friday and is now testing its YTD high at E52. We expect an upside breakout of E52 in sight with a first target at E55.

Deutsche Telekom (EUR 10.45 ; 3.16% ; DTE ; DTEGn.DE)
Thursday, Deutsche Telekom may deliver 3Q net income of E936m compared to E959m a year ago on revenues of E15.5bln vs E16.3bln. Earlier, the Co planned to raise E300m by selling 20yrs bonds. Furthermore, the Co could reach a deal with its rivals on jointly building a high-speed network based on long-term evolution technology in Germany. Graphically, the stock bounced to its MT resistance level at E10.50 last week, if breakout it, a further up move is more likely to occur to E10.85 and E11.5 in extension.

border=0 Royal Bank Of Scotland Group (GBp 45.44 ; 1.47% ; RBS ; RBS.L)
On Friday, Royal Bank of Scotland Group is expected to post 3Q pre-tax profit of 128m compared with a loss before tax of 2.2bln a year earlier. Last month, Financial Times reported the bank could consider selling 1bln in Spanish property loans. Earlier, the Co sold a E250m portfolio of European mezzanine loans. Technically, the Co broke down a MT rising trend line and also remains capped by its 20D MA. A further pullback will be probably towards 40p in the forthcoming weeks.

AIG (USD 41.92 ; 2% ; AIG ; AIG.N)
The same day in the US, AIG could announce 3Q EPS of compared to last year. Recently, the Co said it raised over $20bln from the Hong Kong IPO of its Asian life insurance unit, AIA Group. Earlier, the Co appointed Chairman Steve Miller as interim CEO. From a technical view, the stock might be well forming a bullish flag. As long as its 20D MA holds on the downside, a further rise is highly expected towards $45.

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


Corporate Calendar November 1st - November 5th

Date

Market

Company

Event

Monday, November 1st

 

IR

Ryanair

1st-Half results

 

NE

TNT

3rd-Quarter results

 

US

Simon Property

3rd-Quarter results

 

US

Baker Hughes

3rd-Quarter results

 

US

Principal Financial Group

3rd-Quarter results

 

US

Loews Corp

3rd-Quarter results

Tuesday, November 2nd

 

GE

Metro

3rd-Quarter results

 

UK

BP

3rd-Quarter results

 

US

Mastercard Inc

3rd-Quarter results

 

US

Kellogg

3rd-Quarter results

 

US

Electronic Arts

2nd-Quarter results

 

US

Pfizer

3rd-Quarter results

Wednesday, November 3rd

 

FR

Soci Grale

3rd-Quarter results

 

GE

BMW

3rd-Quarter results

 

US

Time Warner

3rd-Quarter results

 

US

Qualcomm

4th-Quarter results

 

US

Prudential Financial

3rd-Quarter results

 

US

Chesapeake Energy

3rd-Quarter results

Thursday, November 4th

 

FR

BNP Paribas

3rd-Quarter results

 

FR

Alcatel - Lucent

3rd-Quarter results

 

GE

Deutsche Telekom

3rd-Quarter results

 

US

Starbucks

4th-Quarter results

 

US

Kraft Foods

3rd-Quarter results

 

SZ

Swiss Re

3rd-Quarter results

Friday, November 5th

 

FR

Scor

3rd-Quarter results

 

FR

Lafarge

3rd-Quarter results

 

UK

Royal Bank Of Scotland Group

3rd-Quarter results

 

UK

Cable & Wireless Communications

1st-Half results

 

US

AIG

3rd-Quarter results

 

US

Berkshire Hathaway

3rd-Quarter results


Economic Calendar (CET) November 1st - November 5th

Date

Market

Economic data

Period

Expected

Last

Monday, November 1st

14:30:00

US

Personal Income

SEP

0.2%

0.5%

14:30:00

US

Personal Spending

SEP

0.4%

0.4%

16:00:00

US

Construction Spending (MoM)

SEP

-0.4%

0.4%

16:00:00

US

ISM - Manufacturing

OCT

54.3

54.4

16:00:00

US

ISM - Price Paid

OCT

70.7

70.5

Tuesday, November 2nd

   

No major events

     

Wednesday, November 3rd

15:00:00

US

Factory Orders

SEP

0.1%

-0.5%

15:00:00

US

ISM - Non Manufacturing

OCT

53.4

53.2

18:00:00

US

Crude Oil Inventories (WoW chg)

W43

NA

5007

19:15:00

US

Fed: Rates decision

 

0.25%

0.25%

23:00:00

US

Total Vehicule Sales (Mln)

OCT

11.85

11.73

23:00:00

US

Domestic Vehicule Sales (Mln)

OCT

8.92

8.82

Thursday, November 4th

12:00:00

EC

Euro-Zone: PPI (MoM)

SEP

0.3%

0.1%

14:00:00

UK

BoE: Rates decision

 

0.5%

0.5%

14:30:00

US

Initial Jobless Claims (Thsd)

W43

NA

434

14:30:00

US

Nonfarm Productivity

2Q

0.9%

-1.8%

14:30:00

US

Unit Labor Costs

2Q

0.8%

1.1%

14:45:00

EC

ECB: Rates decision

 

1%

1%

Friday, November 5th

11:30:00

UK

PPI - Input (MoM)

OCT

0.9%

0.7%

11:30:00

UK

PPI - Output (MoM)

OCT

0.2%

0.3%

14:30:00

US

Unemployment Rate

OCT

9.6%

9.6%

14:30:00

US

Change in Nonfarm Payrolls (Thsd)

OCT

55.05

-95

14:30:00

US

Change in Manufact. Payrolls (Thsd)

OCT

-4

-6

21:00:00

US

Consumer Credit (Bln)

SEP

-3.117

-3.3

 

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 of this newsletter. Investors are not authorized to copy, reproduce, duplicate, sell, resell or exploit any portion of the Newsletter for their own commercial purposes. In that case, Internaxx will immediately end the subscription.

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