Market Outlook November 29th - December 3rd Print

 

Market Outlook

- WALL STREET:
US indices ended the week mixed on a shortened week due to Thanksgiving holydays. The FOMC minutes, showed central bank officials downgraded their assessment over the US economy at their last meeting. The Fed now expects the US economy to grow by 3% to 3.6% next year vs 3.5% to 4.2% estimated in June, with a 4Q 2011 unemployment rate between 8.9% to 9.1% vs 8.3% to 8.7% previously expected. On the economic data front, US initial jobless claims unexpectedly fell by 34k to 407k (435K expected) and reached their lowest level since July 2008. Also, the University of Michigan index rose to 71.6 in November (69.5 expected) from 67.7 the previous month. 3Q GDP rose 2.5% (+2.4% expected and +2% previously estimated) vs +1.7% for 2Q. However, October durable goods orders fell 3.3% (+0.1% expected) vs +5% for September (revised higher from +3.3%) and October new home sales fell 8.1% MoM to 283k (312k expected). Regarding sectors, retailing stocks advanced more than 3% whereas, banks and diversified financial fell by more than 3%. Technically, a flat consolidation is expected on the S&P 500.

- EUROPE:
In the UK, 3Q GDP rose 2.8% YoY, in line with expectations. From a chartist point of view, the FTSE 100 downside breakout of the 20-day moving average has dampened the bullish sentiment and tarnished the short term outlook. As long as the former highs reached in early November are not surpassed, the risk will remain on the downside. Expect a further correction move towards the support base around 5440 and 5330. In the rest of Europe, Ireland sovereign rating was downgraded to A from AA- by S&P while, German November IFO Business Climate unexpectedly bounced to 109.3 (107.5 expected), its highest level on record. Regarding sectors, banks and insurance declined more than 4.5% whereas, travel and leisure gained 2.4%. Technically, the Stoxx 600 bounced off its medium term bullish channel support at 263.

November 29th - December 3rd

Market Round up

 

Weekly chg (%)

Last

Dow Jones

-.8

11092

Nasdaq 100

.9

2153.9

Dax Xetra

.1

6849

Cac 40

-3.4

3728.7

Foreign Exchange

Euro/dollar : the pair is pulling back on its strong support, the RSI is mixed and calls for caution. LONG above 1.33 towards 1.3850 & 1.4250.

Dollar/yen : the pair is challenging its MT bearish channel upper boundary. SHORT @ 83.8 with 82 or even 80.35 in sight.

Company preview

Colruyt (EUR 38.445 ; -2.73% ; COLR ; COLRt.BR)
On Tuesday, Colruyt, Belgium's discount food retailer, is expected to release 1H net income of appx. E192m compared to E163m a year ago on sales of E3.57bln vs E3.3bln. Earlier, the Co's shareholders voted for a 5-for-1 stock split as well as a capital increase by a public issue of 1m new registered shares reserved for the group's employees for an issue price of E33.40. Technically, the price accelerated on the downside last week following a breakout of its 50D MA's support. Below E39.5, a test of E38 should be in sight before a further pullback to E36.

Thyssenkrupp (EUR 30.7 ; 7.76% ; TKA ; TKAG.DE)
The same day, Thyssenkrupp could announce FY net profit of E713m compared with a net loss of nearly E1.9bln a year ago on revenues of E42.6bln vs E40.6bln. Recently, the Co planned to reorganize its stainless-steel unit. Earlier, the Co would seek a 50% increase in annual steel supply contracts from January 1. The stock price target was raised to E33 from E28 at UBS. Graphically, the shares remain well positively oriented, backed by the ascending 20D MA. As long as E28 is not broken down, look for further upsides to at least E32.

Thomas Cook Group (GBp 193.8 ; 0.73% ; TCG ; TCG.L)
Wednesday, Thomas Cook Group may release FY pre-tax profit of £280m compared with £56m a year ago on sales of £9bln vs around £9.3bln. Last week, the European tour operator planned to set up a Chinese joint venture by 2012. Recently, the Co considered raising stake in its Russian venture with Intourist. From a technical view, the stock is currently trading within a MT range between 200p and 180p and may test the upper boundary at first in the forthcoming days.

Bouygues (EUR 31.67 ; -2.25% ; EN ; BOUY.PA)
On Thursday, Bouygues is expected to post 3Q net income of E370m compared to E477m last year on sales of E8.2bln vs around E8.4bln. Earlier, the Co reported 9mths 2010 consolidated sales of E23.1bln, stable compared with the previous year and down 3% like-for-like and at constant exchange rates. From a chartist view, the stock consolidates below its 20D MA. The risk is now a slide below E30.7, which should call for a new leg down to E30 and E27.8 in extension.

TUI Travel (GBp 214.7 ; 3.22% ; TT/ ; TT.L)
On the same day, TUI Travel could announce FY net profit of £240m vs a net loss of £25m a year ago on revenues of £13.3bln vs £13.9bln. Recently, the European travel company announced a £88m writedown of "irrecoverable balances". Furthermore, CFO Paul Bowtell offered his resignation. From a technical point of view, the stock remains under pressure below 220p-226p, representing the bearish gap on 21st October 2010. As long as the gap is not closed, we expect new weakness to 200p and then to 180p.

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

 

Corporate Calendar November 29th - December 3rd

Date

Market

Company

Event

Monday, November 29th

 

AS

Raiffeisen Intl Bank Holding

3rd-Quarter results

 

GR

EFG Eurobank Ergasias

3rd-Quarter results

Tuesday, November 30th

 

BE

Colruyt

1st-Half results

 

GR

National Bank Of Greece

3rd-Quarter results

 

GE

Thyssenkrupp

annual results

 

UK

Aberdeen Asset Mgmt

annual results

 

UK

Northumbrian Water

1st-Half results

 

NO

Seadrill

3rd-Quarter results

Wednesday, December 1st

 

UK

Thomas Cook Group

annual results

 

UK

Sage Group

annual results

Thursday, December 2nd

 

FR

Bouygues

3rd-Quarter results

 

UK

Britvic

annual results

 

UK

TUI Travel

annual results

 

US

Kroger

3rd-Quarter results

 

US

Novell

4th-Quarter results

Friday, December 3rd

 

UK

Greene King

1st-Half results

 

UK

Berkeley Group

1st-Half results

 

US

Big Lots

3rd-Quarter results

Economic Calendar (CET) November 29th - December 3rd

Date

Market

Economic data

Period

Expected

Last

Monday, November 29th

10:30:00

UK

M4 Money Supply (MoM)

OCT

NA

-0.2%

10:30:00

UK

Net Consumer Credit (Mln)

OCT

.188

.3

11:00:00

EC

Euro-zone: Industrial Confidence

NOV

1.6

0

11:00:00

EC

Business Climate Indicator

NOV

1.07

.98

11:00:00

EC

Euro-Zone: Economic Confidence

NOV

105.4

104.1

11:00:00

EC

Euro-Zone: Consumer Confidence

NOV

-10

-9.5

Tuesday, November 30th

08:45:00

FR

Producer Price Index (MoM)

OCT

NA

0.3%

09:55:00

GE

Unemployment Change (Thsd)

NOV

-19.6

-3

09:55:00

GE

Unemployment Rate

NOV

7.5%

7.5%

11:00:00

EC

Euro-Zone: Unemployment Rate

OCT

10.1%

10.1%

15:45:00

US

Chicago Purchasing Manager Index

NOV

59.8

60.6

16:00:00

US

Consumer Confidence

NOV

53.21

50.2

Wednesday, December 1st

08:00:00

GE

Retail Sales (MoM)

OCT

1.1%

-1.7%

14:30:00

US

Nonfarm Productivity

3Q

2.3%

1.9%

16:00:00

US

Construction Spending (MoM)

OCT

-0.3%

0.5%

16:00:00

US

ISM - Manufacturing

NOV

56.2

56.9

16:30:00

US

Crude Oil Inventories (WoW chg)

W47

NA

1029

23:00:00

US

Total Vehicule Sales (Mln)

NOV

12.08

12.25

Thursday, December 2nd

07:30:00

FR

Unemployment Rate

3Q

NA

9.3%

07:30:00

FR

Unemployment Change (Thsd) (QoQ)

3Q

NA

-70

11:00:00

EC

Euro-Zone: PPI (MoM)

OCT

0.3%

0.3%

11:00:00

EC

Euro-Zone: GDP (QoQ)

3Q

0.4%

0.4%

13:45:00

EC

ECB: Rates decision

 

1%

1%

14:30:00

US

Initial Jobless Claims (Thsd)

W47

423

407

Friday, December 3rd

11:00:00

EC

Euro-Zone: Retail Trade (MoM)

OCT

0.3%

-0.2%

14:30:00

US

Unemployment Rate

NOV

9.6%

9.6%

14:30:00

US

Change in Nonfarm Payrolls (Thsd)

NOV

147

151

14:30:00

US

Change in Manufact. Payrolls (Thsd)

NOV

0

-7

16:00:00

US

Factory Orders

OCT

-0.5%

2.1%

16:00:00

US

ISM - Non Manufacturing

NOV

54.9

54.3

 

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