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Market Outlook October 10th - October 14th PDF Print E-mail

 

Market Outlook

- WALL STREET:
US indices finished higher last week. On the economic front, US nonfarm payrolls rose by 103,000 (+60K exp.) in September after an upwardly revised 57,000 gain the previous month, while the unemployment rate remained at 9.1%. In other news, Apple presented its new iPhone 4S and announced that its founder and president Steve Jobs passed away last week. Looking at sectors, automobiles & components, materials, transportation, semiconductors, climbed over 5.5% last week while real estate and telecommunication services were among the weakest performers. From a chartist view, the S&P500 index remains below its bearish 50D MA. The risk is a slide below 1025 (the nearest support), which should trigger a strong sell-off towards 1040.

- EUROPE:
In the UK, the FTSE 100 gained 3.41% on the week. Technically, the FTSE 100 index struck against its key support at 4900 while the upward potential is likely to be limited by the 5535 resistance. Looking at the economic releases, the Bank of England raised its asset purchase target by £75B to £275B and kept its benchmark interest rate unchanged at 0.5%. UK PMI Services was 52.9 in September vs. 51.1 in August and UK GDP growth was revised at +0.1% for 2Q vs. +0.2% in first estimation. In Europe, German industrial production fell 1% in August vs. +3.9% in July. The ECB kept its benchmark interest rate unchanged at 1.5%. Moody's also downgraded Italy's credit rating to A2 from Aa2 with a negative outlook. More broadly, European indices rallied for another week. The FTSE MIB (+4.67%) rose most, followed by the CAC 40 (+3.81%) and the IBEX 35 (+2.95%). All sectors gained ground. Basic resources jumped 6.77%, while oil & gas and insurance increased by more than 4%. Technically, the Stoxx 600 index has broken above its declining 50D MA, and is now expected to test the major resistance at 240 in the coming days.

 

  October 10th - October 14th

Market Round up

 

Weekly chg (%)

Last

Dow Jones

1.7

11103.1

Nasdaq 100

3

2202.8

Dax Xetra

3.2

5675.7

Cac 40

3.8

3095.6

Foreign Exchange

Euro/dollar : the pair remains under pressure and is approaching its next support. SHORT below 1.40 with 1.2965 & even 1.2640 in sight.

Dollar/yen : the pair remains under pressure and is challenging its previous low. SHORT below 79.5 with 75.95 or even 73.75 in sight.

Company preview

 Alcoa (USD 9.71 ; 1.46% ; AA ; AA.N)
On Tuesday, Alcoa, the aluminum producer, is expected to deliver 3Q EPS of $0.23 compared to $0.09 a year earlier. Recently, The Co had its share-price estimate cut to $17 from $22 by JP Morgan.Technically, the price has broken a key support at $15.1. Therefore further drop towards $8.25 seems to be the most probable scenario in the forthcoming weeks.

 ASML Holding (EUR 26.83 ; 2.88% ; ASML ; ASML.AS)
On Wednesday, ASML Holding, the EU-based semiconductor manufacturing, may announce 3Q net income of E328M compared with E268M last year on revenues of appx. E1.4B vs around E1.18B a year ago. Last week, the Co was downgraded to "hold" from "buy" at Standard & Poor's. From a chartist view, the stock price has bounced off its key support at E25. As long as $50 holds on the downside, eye further advance towards E28.

 Google (USD 515.12 ; 0.02% ; GOOG ; GOOG.O)
On Thursday, Google, the US internet company, could unveil 3Q EPS of around $8.8 compared to $6.72 a year ago on sales of $7.2B vs $7.3B. Recently, the Co announced a plan to spend over $200M building three data centers in Asia, one in each of Singapore, Taiwan and Hong Kong. From a technical point of view, a technical rebound is in force since it has bounced off a rising trend line. Further rise to $550 seems more likely in the forthcoming days.

 JP Morgan Chase (USD 30.7 ; 1.93% ; JPM ; JPM.N)
The same day, JP Morgan Chase, the US financial institution, is expected to post a 3Q EPS of $0.95 compared to $1.24 a year ago. Exposure to Greece, Italy, Ireland, Portugal and Spain is about $15B net of collateral and hedging or $100B gross. This is mostly in Spain and Italy. JPMorgan management estimates a maximum loss of $3B. Technically, the downward trend remains intact. Key moving averages are heading down and should maintain downward pressure. Hence, further decline towards $27.5 seems more likely.

 Suedzucker (EUR 21.435 ; 0.21% ; SZU ; SZUG.DE)
Finally, Suedzucker, a German sugar producer, is expected to release 3Q net income of E100M compared with E65M last year on revenues of E1.7B vs E1.6B. The Co was downgraded to "hold" from "buy" at Deutsche Bank. The 12-month target price is E26 per share. Graphically, the stock is heading down, but is also close to the a significant support at E21. Therefore, a technical rebound cannot be ruled out with E23 at first.

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

Corporate Calendar October 10th - October 14th

Date

Market

Company

Event

 Monday, October 10th

   

No major earnings expected

 

 Tuesday, October 11th

 

SP

Gamesa Tecnologica

3rd-Quarter results

 

UK

Brown (N) Group Plc

1st-Half results

 

US

Alcoa

3rd-Quarter results

 Wednesday, October 12th

 

NE

ASML Holding

3rd-Quarter results

 

US

Host Hotels & Resorts

3rd-Quarter results

 

US

Pepsico

3rd-Quarter results

 Thursday, October 13th

 

FR

Casino

3rd-Quarter results

 

GE

Suedzucker

2nd-Quarter results

 

UK

WH Smith

annual results

 

US

Google

3rd-Quarter results

 

US

JP Morgan Chase

3rd-Quarter results

 

US

Safeway

3rd-Quarter results

 Friday, October 14th

 

SP

Zardoya Otis

3rd-Quarter results

 

US

Mattel

3rd-Quarter results

 

US

Progressive

3rd-Quarter results


Economic Calendar (CET) October 10th - October 14th

Date

Market

Economic data

Period

Expected

Last

 Monday, October 10th

08:00:00

GE

Current Account (Bln)

AUG

NA

7.5

08:00:00

GE

Trade Balance (Bln)

AUG

NA

10.4

08:00:00

GE

Imports (MoM)

AUG

NA

-0.5%

08:00:00

GE

Exports (MoM)

AUG

NA

-1.9%

 Tuesday, October 11th

10:30:00

UK

Industrial Production (MoM)

AUG

NA

-0.2%

10:30:00

UK

Manufacturing Production (MoM)

AUG

NA

0.1%

13:59:00

GE

Wholesale Price Index (MoM)

SEP

NA

0.1%

13:59:00

US

Monthly Budget Satement (Bln)

SEP

NA

-134.2

16:00:00

UK

GDP Estimate (NIESR)

SEP

NA

0.2%

 Wednesday, October 12th

07:30:00

FR

Consumer Price Index (MoM)

SEP

NA

0.5%

07:30:00

FR

CPI - EU Harmonised (MoM)

SEP

NA

0.6%

08:45:00

FR

Current Account (Mln)

AUG

NA

-4.5

10:30:00

UK

Unemployment Rate (ILO)

AUG

NA

7.9%

11:00:00

EC

Euro-Zone: Industrial Production (MoM)

AUG

NA

0.9%

 Thursday, October 13th

08:00:00

GE

Consumer Price Index (MoM)

SEP

NA

0.1%

08:00:00

GE

CPI - EU Harmonised (MoM)

SEP

NA

0.1%

10:30:00

UK

Trade Balance Non EU25 (Mln GBP)

AUG

NA

-5505

10:30:00

UK

Visible Trade Balance (Mln GBP)

AUG

NA

-8922

14:30:00

US

Trade Balance (Bln)

AUG

-45.6

-44.8

16:30:00

US

Crude Oil Inventories (WoW chg)

W40

NA

-4679

 Friday, October 14th

11:00:00

EC

Euro-Zone: Trade Balance (Bln)

AUG

NA

4317.3

11:00:00

EC

Euro-Zone: CPI (MoM)

SEP

NA

0.2%

14:30:00

US

Retail Sales

SEP

0.4%

0%

14:30:00

US

Retail Sales less Autos

SEP

0.3%

0.1%

15:55:00

US

U. of Michigan Confidence

SEP

NA

59.4

16:00:00

US

Business Inventories

AUG

0.5%

0.4%


 

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.

 

INTERNAXX

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