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Market Outlook September 13th -September 17th PDF Print E-mail

Market Outlook

- WALL STREET:

US Indices closed up last shortened week due to US Labor Day on Monday. Wednesday, the Beige Book announced that the 12 regional Fed banks survey:"suggested continued growth in national economic activity during the reporting period of mid-July through the end of August, but with widespread signs of a deceleration compared with preceding periods." Thursday, Weekly Jobless Claims declined to 451k (470k expected) from 478k and July Trade Balance deficit narrowed to $42.8bln ($47.0bln expected) from $49.8bln (revised from $49.9bln). Regarding sectors, Pharmacy, Health Care Equipment, Diversified Financials and Capital Goods stocks advanced more than 2.5% during the week whereas, Utilities, Real Estate and Semiconductors declined. Technically, the S&P 500 is pressured by its trading range resistance at 1130.

- EUROPE:
European indices advanced last week despite a weak start due to renewing concern over certain European countries debt. Indeed, last Monday the 10-year spread between German bond yields and Irish & Portuguese debt reached an all-time high while the German vs. Greek rose to its highest since May (date of the European Union / IMF rescue package). ECB Governing Council member Ewald Nowotny said about the withdrawing of emergency measures:"Were still facing an economic development with a very high uncertainty in many respects. Its certainly too early to take a clear position." This week European banks (mainly German ones) might be under pressure after the Bank for International Settlements announced this week end an agreement regarding Basel III rules. Key points are the followings: common equity requirement to rise to 4.5% from 2% currently. Tier one capital ratio to rise to 6% from 4%. New rules will be implemented in stages from 2013 to 2018. Regarding sectors, automobile stocks rose 4.24% on average whereas Insurance and Banks added less than 0.8% on average. Regarding technical, the Stoxx 600, the upside potential is likely to be limited by the 270 resistance area.

 

  September 13th - September 17th

 

Market Round up

 

Weekly chg (%)

Last

Dow Jones

1.4

10462.8

Nasdaq 100

2.8

1892.3

Dax Xetra

1.3

6214.8

Cac 40

1.5

3725.8

border=0 Foreign Exchange

Euro/dollar : the pair has struck against its new resistance, the RSI is badly directed. SHORT below 1.3250 towards 1.2450 & 1.2130.

Dollar/yen : the pair stands within a ST bearish channel and has broken below its previous low. SHORT @ 87.8 with 83 or even 80.50 in sight.

 

 

Company preview

Best Buy (USD 33.88 ; 1.26% ; BBY ; BBY.N)
On Tuesday, Best Buy Co. is expected to report 2Q EPS of $0.44 compared to $0.37 a year earlier on sales of $11.5bln vs $11bln. Recently, the US retailer planned to offer store credit in exchange for used video games at its 600 stores. The stock's price target was cut to $47 from $51 at Barclays Capital. Technically, the shares broke above its MT declining trend line last week and should continue its ST current bounce to $35.7 and $37 in extension.

border=0 Next (GBp 2037 ; -0.78% ; NXT ; NXT.L)
Wednesday, Next may announce 1H pre-tax profit of 220m compared with around 186m a year earlier on revenues of 1.57bln vs 1.51bln. Earlier, the British Retail Consortium reported UK August retail sales at stores open at least 12mths up 1% YoY vs a 0.5% gain in July. A week ago, the Co's price target was cut to 2,400p vs 2,600p at Citigroup. Graphically, the stock is still under pressure below its nearest bearish gap on August 4, 2010. As long as the gap remains open, a further pullback is more likely to 1915p after a ST consolidation.

border=0 Kingfisher (GBp 211.1 ; -2.04% ; KGF ; KGF.L)
On Thursday, Kingfisher, the UK's home improvement consumer goods retailer, is expected to release its 1H results. Profit before-tax may reach 345m vs 288m a year ago on revenues of 5.3bln vs 5.5bln. Recently, the Co's price target was cut to 295p vs 325p at HSBC with an "overweight" rating unchanged. From a chartist point of view, the stock consolidates above its 20D MA and should test 220p at first before a new up move to 233p.

border=0 Fedex Corp (USD 84.16 ; 2.99% ; FDX ; FDX.N)
The same day, Fedex Corp could unveil 1Q EPS of $1.2 compared with $0.58 a year earlier on sales up to appx. $9.5bln vs $8bln. Earlier, the Co's price target was raised to $109 from $106 at Barclays Capital with an "overweight" rating unchanged. From a technical view, the price is approaching its key resistance level around $87.5. A test could be in sight before any further bounces to $90 and even to $95 as possible.

border=0 Oracle (USD 25.05 ; 11.43% ; ORCL ; ORCL.O)
Oracle is expected to publish, after market, 1Q EPS of appx. $0.37 compared to $0.29 last year on sales of $7.3bln vs $5.1bln on Thursday. Last week, the Co hired former HP's CEO Mark Hurd as a president and board member. In addition, the Co reached a co-development initiative with Wipro Technologies to jointly develop a product lifecycle management solution for the consumer packaged goods industry. Technically, the shares surged recently, backed by a big bullish gap. Above $23.8, look for further upsides towards $26.5 in the forthcoming days.

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


Corporate Calendar September 13th - September 17th

Date

Market

Company

Event

border=0 Monday, September 13th

   

No major earnings expected

 

border=0 Tuesday, September 14th

 

UK

Ashmore Group

annual results

 

US

Best Buy

2nd-Quarter results

 

US

Kroger

2nd-Quarter results

 

US

Pall

4th-Quarter results

border=0 Wednesday, September 15th

 

UK

Next

1st-Half results

border=0 Thursday, September 16th

 

UK

Kingfisher

1st-Half results

 

US

Fedex Corp

1st-Quarter results

 

US

Oracle

1st-Quarter results

border=0 Friday, September 17th

 

US

Discover Financial Services

3rd-Quarter results


Economic Calendar (CET) September 13th - September 17th

Date

Market

Economic data

Period

Expected

Last

border=0 Monday, September 13th

10:30:00

FR

Sentix Investor Conf.

SEP

9

8.5

08:45:00

FR

Current Account (Mln)

JUL

NA

-2.7

20:00:00

US

Monthly Budget Satement (Bln)

AUG

-102.1

-165

border=0 Tuesday, September 14th

11:00:00

EC

Euro-Zone: Industrial Production (MoM)

JUL

0.1%

-0.1%

11:00:00

GE

Zew Survey (Econ. Sentiment)

SEP

10.6

14

11:00:00

GE

Zew Survey (Current Situation)

SEP

47.4

44.3

14:30:00

US

Retail Sales

AUG

0.3%

0.4%

14:30:00

US

Retail Sales less Autos

AUG

0.3%

0.2%

16:00:00

US

Business Inventories

JUL

0.5%

0.3%

border=0 Wednesday, September 15th

10:30:00

UK

Unemployment Rate (ILO)

JUL

7.78%

7.8%

11:00:00

EC

Euro-Zone: CPI (MoM)

AUG

0.2%

-0.3%

14:30:00

US

Empire Manufacturing

SEP

7.4

7.1

15:15:00

US

Industrial Production (MoM)

AUG

0.2%

1%

15:15:00

US

Industrial Capacity Utilization

AUG

75%

74.8%

16:30:00

US

Crude Oil Inventories (WoW chg)

W36

NA

-1853

border=0 Thursday, September 16th

10:30:00

UK

Retail Sales (MoM)

AUG

0.1%

0.9%

11:00:00

EC

Euro-Zone: Trade Balance (Bln) (MoM)

JUL

NA

2443.1

14:30:00

US

Initial Jobless Claims (Thsd)

W36

457

451

14:30:00

US

Producer Price Index (MoM)

AUG

0.4%

0.2%

14:30:00

US

PPI - Ex Food & Energy (MoM)

AUG

0.1%

0.3%

16:00:00

US

Philadelphia Fed.

SEP

.8

-7.7

border=0 Friday, September 17th

08:00:00

GE

Producer Price Index (MoM)

AUG

0.3%

0.5%

10:00:00

EC

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

JUL

NA

1

14:30:00

US

Consumer Price Index (MoM)

AUG

0.2%

0.3%

14:30:00

US

CPI - Ex Food & Energy (MoM)

AUG

0.1%

0.1%

15:55:00

US

U. of Michigan Confidence

AUG

70.1

68.9

 

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