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Market Outlook October 17th - October 21st PDF Print E-mail

 

Market Outlook

- WALL STREET:
US indices rallied last week, gaining more than 4.5%. On the economic front, retail sales were up 1.1% YoY in September (+0.7% exp.) while the University of Michigan confidence index dropped to 57.5 in October from 59.4 the previous month. Looking at company earnings, JPMorgan Chase said 3Q net income was $4.3B vs $4.4B year ago, while Google posted 3Q revenue ex-traffic acquisition costs $7.51B vs $7.23B expected. All sectors finished in the green with automobiles, technology hardware and equipment and energy surged, being the top gainers. From a technical view, the S&P500 index has reversed up, and is now approaching its resistance at 1230. Therefore, a ST consolidation cannot be ruled out before further upsides to 1255.

- EUROPE:
In the UK, the FTSE 100 gained ground for the third week. Technically, the index recently continued to rebound, and is very close to its resistance around 5535. A test of this threshold should be in sight before a new bounce to 5650 as our next target. Looking at economic data in Europe, UK industrial production gained 0.2% in August MoM vs -0.4% in July and euro zone industrial production rose by 1.2% in August MoM vs +1% in July. Standard & Poor's downgraded BNP Paribas's credit rating and Spain's sovereign rating, while UBS's long-term issuer default rating was downgraded to "A" from "A+" by Fitch. All European indices closed higher. The DAX was up 5.14% on the week, while the FTSE MIB, the AEX and the OMX rose by more than 4%. Except for health care (-0.21%), all sectors in Europe finished higher, led by automobiles (+10.8%). Technically, the Stoxx 600 index remains above its 20D MA, which has already turned up, and is likely to cross over the 50D one. The index is now challenging its key level at 240, if breakout, look for a further rise to 250.

 

October 17th - October 21st

Market Round up

 

Weekly chg (%)

Last

Dow Jones

4.9

11644.5

Nasdaq 100

7.7

2371.9

Dax Xetra

5.1

5967.2

Cac 40

4

3217.9

Foreign Exchange

Euro/dollar : the pair is posting a rebound but stands below its new resistance, the RSI is capped by a declining trend line. SHORT below 1.40 with 1.3150 & even 1.2965 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

 Apple (USD 422 ; 14.12% ; AAPL ; AAPL.O)
On Tuesday, Apple is expected to report its 4Q adjusted EPS of $7.3 compared to EPS of $4.64 a year earlier and sales of $29.5B vs $20.3B. Last week, the release of its iPhone 4S triggered enthusiasm worldwide, as sales of the new device are expected to top the levels of the iPhone 4 levels for its introductory week. Technically, the stock strongly bounced off from its major MT support around $350 in the past days, but should now challenge its resistance at $420 before any further upsides.

 Bank of America (USD 6.19 ; 4.92% ; BAC ; BAC.N)
On the same day, Bank of America may publish 3Q EPS of $0.24 compared to $0.31 a year earlier. Last week, JPMorgan Chase posted 3Q earnings below analysts' estimate. From a chartist view, the stock remains under pressure below its bearish 50D MA. Even though a ST consolidation cannot be ruled out, its extent should be limited before a further pullback to $5.

 BSkyB (GBp 676.5 ; -0.07% ; BSY ; BSY.L)
On Wednesday, British Sky Broadcasting, the British pay-TV company, 1Q sales are expected at £1.64B (vs £1.53B in 1Q10) with EPS of 11p, down from 13p a year earlier. The Co which is currently under probe by the Competition Commission in its movies on pay TV market investigation, reaffirmed that its customers were "well served" last month. Graphically, the price is still moving within a MT range pattern between 700p and 615p, and may test the upper boundary at first.

 Nokia (EUR 4.604 ; 1.72% ; NOK1V ; NOK1V.HE)
Thursday, Nokia, the mobile device manufacturer, could unveil 3Q LPS of E0.014 (vs 3Q EPS of E0.14 a year earlier) on sales of E8.81B, down from E10.27B. The Co started to ship its new N9 phone on September 27 and said it injected E500M of capital into Nokia Siemens Networks to further strengthen the company's financial position. From a technical view, the MT outlook is still bearish on the stock, but a ST technical rebound seems more likely to E5.00 in the forthcoming days, as long as E4.20 is not broken.

 General Electric (USD 16.6 ; 7.1% ; GE ; GE.N)
Friday, General Electric, a diversified technology, media and financial services company, may post 3Q revenues of $34.9B and EPS of $0.315 compared to revenue of $35.7B and EPS of $0.18 in the same period of 2010. The Co said it will pay $3.3B plus accrued and unpaid dividends to buy back preferred shares held by Berkshire Hathaway. Barclays rated the stock "overweight". From a technical perspective, the stock broke its MT key resistance at $16.5 and trades above its 20 and 50 day MA. Hence, a further rebound is expected towards $17.5.

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


Corporate Calendar October 17th - October 21st

Date

Market

Company

Event

 Monday, October 17th

 

NE

Philips Electronics

3rd-Quarter results

 

SZ

Kuehne + Nagel

3rd-Quarter results

 

US

Citigroup

3rd-Quarter results

 

US

Halliburton

3rd-Quarter results

 

US

Hasbro

3rd-Quarter results

 

US

Wells Fargo & Co

3rd-Quarter results

 Tuesday, October 18th

 

UK

Whitbread

1st-Half results

 

US

Apple

4th-Quarter results

 

US

Bank of America

3rd-Quarter results

 

US

Goldman Sachs

3rd-Quarter results

 

US

IBM

3rd-Quarter results

 

US

Intel

3rd-Quarter results

 Wednesday, October 19th

 

UK

BSkyB

1st-Quarter results

 

UK

Home Retail

1st-Half results

 

US

American Express

3rd-Quarter results

 

US

Bank of New York Mellon

3rd-Quarter results

 

US

Ebay

3rd-Quarter results

 

US

Morgan Stanley

3rd-Quarter results

border=0 Thursday, October 20th

 

FI

Nokia

3rd-Quarter results

 

SW

Ericsson

3rd-Quarter results

 

US

AT&T

3rd-Quarter results

 

US

Eli Lilly

3rd-Quarter results

 

US

Microsoft

1st-Quarter results

 

US

Philip Morris International

3rd-Quarter results

 Friday, October 21st

 

FI

Stora Enso

3rd-Quarter results

 

SW

Scania

3rd-Quarter results

 

US

General Electric

3rd-Quarter results

 

US

Honeywell

3rd-Quarter results

 

US

McDonald's

3rd-Quarter results

 

US

Schlumberger

3rd-Quarter results


Economic Calendar (CET) October 17th - October 21st

Date

Market

Economic data

Period

Expected

Last

 Monday, October 17th

14:30:00

US

Empire Manufacturing

OCT

-3.3

-8.8

15:15:00

US

Industrial Production (MoM)

SEP

0.17%

0.18%

15:15:00

US

Industrial Capacity Utilization

SEP

77.5%

77.4%

 Tuesday, October 18th

10:30:00

UK

CPI - EU Harmonised (MoM)

SEP

NA

0.6%

11:00:00

GE

Zew Survey (Econ. Sentiment)

OCT

NA

-43.3

11:00:00

GE

Zew Survey (Current Situation)

OCT

NA

43.6

14:30:00

US

Producer Price Index (MoM)

SEP

0.2%

0%

14:30:00

US

PPI - Ex Food & Energy (MoM)

SEP

0.1%

0.1%

16:00:00

US

NAHB Housing Market

OCT

15

14

border=0 Wednesday, October 19th

10:00:00

EC

Euro-Zone: Current Account (Bln) (MoM)

AUG

NA

-3.2

14:30:00

US

Consumer Price Index (MoM)

SEP

0.2%

0.4%

14:30:00

US

CPI - Ex Food & Energy (MoM)

SEP

0.15%

0.24%

14:30:00

US

Housing Starts (Thsd)

SEP

590

571

14:30:00

US

Bulding Permits (Thsd)

SEP

612

625

 Thursday, October 20th

08:00:00

GE

Producer Price Index (MoM)

2Q

NA

-0.3%

10:30:00

UK

Retail Sales (MoM)

SEP

NA

-0.1%

16:00:00

EC

Euro-Zone: Consumer Confidence

SEP

NA

-19.1

16:00:00

US

Existing Home Sales (Mln)

SEP

4.89

5.03

16:00:00

US

Philadelphia Fed.

OCT

-8.5

-17.5

16:00:00

US

Leading Indicators

SEP

0.2%

0.3%

 Friday, October 21st

08:45:00

FR

Business Confidence Indicator

OCT

NA

99

08:45:00

FR

Production Outlook Indicator

OCT

NA

-29

10:00:00

GE

IFO - Business Climate

SEP

NA

107.5

10:00:00

GE

IFO - Current Assessment

OCT

NA

117.9

10:00:00

GE

IFO - Expectations

OCT

NA

98

10:30:00

UK

Public Sector Net Borrowing (Bln)

SEP

NA

13.161


 

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.

INTERNAXX

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