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Market Outlook November 8th - November 12th PDF Print E-mail

Market Outlook

- WALL STREET:
US indices rose last week. The S&P reached its highest level since September 2008. The Fed announced its will to purchase a further $600bln of longer-term Treasury securities by the end of 2Q 2011, at a pace of about $75bln / mth. The Committee will maintain its existing policy of reinvesting principal payments from its securities holdings and will regularly review the pace of its securities purchases and the overall size of the asset-purchase program in light of incoming information. On the employment front, weekly jobless claims bounced to 457k (442k expected) from 437k (revised higher from 434k) however, October change in nonfarm payrolls rose to 151k (60k expected) vs -41k in September (revised higher from -95k). Then, unemployment rate was unchanged at 9.6%, as expected. On the real estate market front, September pending home sales fell 1.8% MoM (+3% expected) vs +4.4% in August (revised higher from +4.3%). Regarding sectors, automobile (mainly Ford) jumped 11% during the week while banks and diversified financial added 9% and 7.66% respectively. Technically, the S&P 500 is well directed and is expected to reach 1240 and 1304 in the coming days.

- EUROPE:

In the UK, the FTSE 100 added 3.53% during the week and was the best performing European equity index. The Bank of England maintained its £200bln asset purchase program and let its main rate unchanged at 0.5%. On the economic front, October PMI manufacturing growth index unexpectedly rose to 54.9 (vs 53 expected) from 53.3 and PMI Service to 53.2 (52.6 expected) from 52.8 whereas, PMI construction fell to 51.6 (vs. 53.0 expected) from 53.8. Technically, the FTSE 100 is seen pushing higher towards 5960 and 6039. In the rest of Europe, the Ibex fell 3.56% and the FTSE MIB 1.19% while the STXE 50 ended up 2.45%. The ECB let its main rate unchanged at 1%. Basic resources stocks rocketed 8.43% while retail stocks declined 1.55%. Technically, on the Stoxx 600, next up targets are set at 275 and 280

 

  November 8th - November 12th

Market Round up

 

Weekly chg (%)

Last

Dow Jones

2.9

11444.1

Nasdaq 100

2.9

2186.7

Dax Xetra

2.3

6754.2

Cac 40

2.2

3916.7

Foreign Exchange

Euro/dollar : the pair is shaping a bullish flag, the daily RSI is supported by a rising trend line. LONG above 1.33 towards 1.4250 & 1.46.

Dollar/yen : the pair remains within a bearish channel. SHORT @ 83.8 with 79 or even 78.15 in sight.

 

 

Company preview

Vodafone (GBp 173.9 ; 2.38% ; VOD ; VOD.L)
On Tuesday, Vodafone Group, the UK mobile telecommunications giant, is expected to release 1H pre-tax profit of £5.5bln vs £4.8bln on revenues of £22.3bln vs £21.8bln. Last week, the Group could plan to sell some of its shares in overseas mobile operators, according to Financial Times' report. Recently, the Co's price target was raised to 215p from 200p at Deutsche Bank. Technically, the stock price remains on the upside within its MT bullish channel. Above 165, look for a further bounce to 180p & 200p in extension.

E.ON (EUR 22.62 ; 0.53% ; EOAN ; EONG.DE)
On Wednesday, E.ON could announce 3Q net income of around E1bln compared with E1.8bln a year ago. Recently, the Co could be in talks to sell its UK power network for £3.5bln (Sunday Times). Earlier, the Co may consider buying GDF Suez's 25% stake in EDF's proposed nuclear plant at Penly, France. From a technical view, the price consolidates above its key horizontal support at E22, as long as this level holds on the downside, a further rise is more likely to E24 and then to E24.6.

Cisco Systems (USD 24.26 ; 6.12% ; CSCO ; CSCO.O)
The same day in the US, Cisco Systems may publish 1Q EPS of around $0.4 compared to $0.3 a year earlier on sales of $10.7bln vs $9bln. Earlier, the Co launched a videoconferencing system to let consumers carry out video chats from high-definition, Internet-connected. Last week, the Co's price target was raised to $25 from $24 at UBS. Graphically, the stock has just broken above its resistance at $24 with a bullish gap. Since the price remains well supported by a rising 20D MA, a new leg up should occur to $25 and $26 as a next target.

Siemens (EUR 83.9 ; 2.22% ; SIE ; SIEGn.DE)
Thursday, Siemens is expected to deliver FY net profit of E5bln compared with E2.3bln a year ago on revenues of E74.7bln vs E76.6bln. Recently, the Co would provide IT-services support to London's planned electric vehicle-charging network through 2013. In addition, the Co won contract worth $466m from Amtrak to construct 70 electric locomotives in the US. From a chartist view, the stock is currently testing its nearest resistance at E85. A ST consolidation, therefore, cannot be ruled out before any further upsides to E88.5.

EADS (EUR 18.4 ; -2.57% ; EAD ; EAD.PA)
On Friday, EADS may release 3Q net income of appx. E95m compared with a loss of E87m a year ago on revenues of E10.8bln vs E9.5bln. Last week, China Aviation Supplies signed with Airbus for a total of 102 aircraft of which 66 are new orders, consisting of 50 A320 Family aircraft, six A330s and ten A350 XWBs. From a technical point of view, the stock price gapped down last Thursday and is still under pressure below E19.5. Hence, a further pullback is highly expected towards E17 in the forthcoming days.

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


Corporate Calendar November 8th - November 12th

Date

Market

Company

Event

Monday, November 8th

 

AS

Andritz

3rd-Quarter results

 

GE

Commerzbank

3rd-Quarter results

 

US

Sysco

1st-Quarter results

 

US

Frontier Communications

3rd-Quarter results

 

US

Priceline.com

3rd-Quarter results

Tuesday, November 9th

 

DE

Carlsberg

3rd-Quarter results

 

IT

Enel

3rd-Quarter results

 

UK

Vodafone

1st-Half results

 

US

Marsh & McLennan

3rd-Quarter results

 

US

Tyco International

4th-Quarter results

 

SZ

Adecco

3rd-Quarter results

Wednesday, November 10th

 

FR

Crédit Agricole

3rd-Quarter results

 

GE

E.ON

3rd-Quarter results

 

GE

Allianz

3rd-Quarter results

 

UK

Sainsbury

1st-Half results

 

US

Cisco Systems

1st-Quarter results

 

US

Sara Lee

1st-Quarter results

Thursday, November 11th

 

GE

Siemens

annual results

 

GE

RWE

3rd-Quarter results

 

SP

Telefonica

3rd-Quarter results

 

US

Viacom B

4th-Quarter results

 

US

Kohl's

3rd-Quarter results

 

US

Walt Disney

4th-Quarter results

Friday, November 12th

 

FR

EADS

3rd-Quarter results

 

IT

Banco Popolare

3rd-Quarter results

 

US

Agilent Technologies

4th-Quarter results

 

US

Dr Horton

4th-Quarter results

 

US

JC Penney

3rd-Quarter results

 

SZ

Richemont

1st-Half results


Economic Calendar (CET) November 8th - November 12th

Date

Market

Economic data

Period

Expected

Last

Monday, November 8th

08:00:00

GE

Current Account (Bln)

SEP

9.3

4.6

08:00:00

GE

Trade Balance (Bln)

SEP

11.6

9

08:00:00

GE

Imports (MoM)

SEP

0.5%

0.9%

08:00:00

GE

Exports (MoM)

SEP

0.9%

-0.4%

12:00:00

GE

Industrial Production (MoM)

SEP

0.4%

1.7%

Tuesday, November 9th

 

UK

GDP Estimate (NIESR)

OCT

NA

0.5%

08:00:00

GE

Consumer Price Index (MoM)

SEP

0.1%

0.1%

08:45:00

FR

Trade Balance (Mln)

SEP

NA

-4932

10:30:00

UK

Industrial Production (MoM)

SEP

0.4%

0.2%

10:30:00

UK

Manufacturing Production (MoM)

SEP

0.2%

0.3%

16:00:00

US

Wholesale Inventories

SEP

0.7%

0.8%

Wednesday, November 10th

07:30:00

FR

Consumer Price Index (MoM)

OCT

0.2%

-0.1%

08:00:00

GE

Wholesale Price Index (MoM)

OCT

NA

1%

14:30:00

US

Initial Jobless Claims (Thsd)

W44

451

457

14:30:00

US

Trade Balance (Bln)

SEP

-44.9

-46.3

16:30:00

US

Crude Oil Inventories (WoW chg)

W44

NA

1950

20:00:00

US

Monthly Budget Satement (Bln)

OCT

-152.1

-34.5

Friday, November 12th

07:30:00

FR

GDP (QoQ)

2Q

0.5%

0.7%

11:00:00

EC

Euro-Zone: Industrial Production (MoM)

SEP

0.2%

1.2%

11:00:00

EC

Euro-Zone: GDP (QoQ)

2Q

0.4%

1%

15:55:00

US

U. of Michigan Confidence

OCT

69.5

67.7

 

 

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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