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Market Outlook September 20th - September 24th PDF Print E-mail

Market Outlook

- WALL STREET:
US Indices gained ground last week with most of the advance done on Monday after Basel Committee on Banking Supervision announced an agreement regarding Basel III rules during the week end. New rules were seen as not being a too strong pressure for US banks. However, this announcement failed to sustain the sectors the days after as banks & diversified financial ended the week slightly up after their Monday rally. As regard to economic releases, the week started with an August US. Budget deficit narrowing to -$90.5bln (-$95bln expected) vs. -$103.6bln in July. Tuesday, August Advance retail Sales rose 0.4% (0.3% expected) vs. 0.3% in July (revised lower from +0.4%) while Retail Sales less Autos jumped 0.6% (0.3% expected) vs. +0.1% in July (revised lower from +0.2%). Retail stocks advanced 3% during the week. Wednesday September Empire Manufacturing declined to 4.14 (8.00 expected) from 7.10 in August. August Industrial Production rose 0.2% (in line with the consensus) but was revised lower for July to +0.6% from +1%. Weekly jobless claims declined to 450k (459k expected) vs. 453k the previous week (revised higher from 451k). September Philadelphia Fed Index rose to -0.7 (+0.5 expected) from -7.7 on August. Finally, Friday, September University of Michigan Confidence dropped to 66.6 (70 expected) vs. 68.9 in July. Regarding sectors, Semiconductors, Automobiles, Technology Hardware advanced more than 4.5% whereas Media, Food & Beverage, Transportation, Energy, Utilities ended the week in the negative territory. Technically, the S&P 500 remains pressured by its trading range resistance at 1130.

- EUROPE:

European Indices ended the week almost all in the negative territory except for the OMX (+1.22%) and the FTSE 100 (+0.12%). The FTSE MIB declined the most, easing 1.51%. Regarding sectors, Retail and Automobiles stocks advanced more than 2% whereas Utilities dropped 3.49%. Regarding technical, the Stoxx 600, the upside potential is likely to be limited by the 270 resistance area.

  September 20th - September 24th

Market Round up

 

Weekly chg (%)

Last

Dow Jones

1.4

10607.9

Nasdaq 100

3.4

1955.8

Dax Xetra

-.1

6209.8

Cac 40

-.1

3722

Foreign Exchange

Euro/dollar : the pair has rebounded on its support and should post a further up move as the RSI is well directed. LONG above 1.2450 towards 1.3250 & 1.3510.

Dollar/yen : the pair is posting a rebound but stands within a bearish channel. SHORT @ 87.8 with 83 or even 80.50 in sight.

 

Company preview

Adobe Systems (USD 32.78 ; 1.8% ; ADBE ; ADBE.O)
On Tuesday, Adobe Systems is expected to publish 3Q EPS of around $0.5 compared to $0.28 a year earlier on sales of $985m vs $698m. Recently, the Co launched its Adobe Flash Media Server 4 software, the industry solution for streaming video and real-time communication. Earlier, the stock was downgraded to "equal weight" from "overweight" at Morgan Stanley. Technically, the price surged last week following a breakout of the neckline of its "double-bottom" pattern. A test of $34 should be in sight before any further upsides towards $36.

General Mills (USD 36.17 ; -2.74% ; GIS ; GIS.N)
The same day, General Mills may release 1Q EPS of $0.63 compared with $0.64 a year ago on sales of around $3.6bln vs $3.5bln. Early this month, the Co reaffirmed its FY guidance of $2.46-$2.48 per share (the consensus of $2.48 per share). In addition, the Co doesn't expect an increase from last year in 1Q net income. From a technical point of view, the stock is well positively oriented above its rising 20D MA. Above $35.5, look for a new bounce to $38 and $39 in extension.

border=0 Inditex (EUR 57.61 ; 1.77% ; ITX ; ITX.MC)
Wednesday, Inditex could announce 1H net income of E563m compared to E375m a year earlier on revenues of E5.5bln vs E4.86bln. Earlier, the world's largest clothing retailer launched online sales of its fashion label, Zara in some of European countries. The Co's price target was raised to E65 from E60 at Citigroup. From a chartist point of view, the shares achieved a year-to-date new high after the penetration of its former resistance at E54, which will probably open the way to E60 and event to E65 as possible.

border=0 Bed Bath & Beyond (USD 41.1 ; 1.86% ; BBBY ; BBBY.O)
On the same day, Bed Bath & Beyond is expected to report its 2Q results. The US retailer may publish 2Q EPS of $0.63 compared with $0.52 last year with sales of $2.1bln vs $1.9bln. From a technical view, the stock is currently consolidating above its support at $40. As long as the 20D MA still holds on the downside, a further rebound is more likely towards $45 in the forthcoming days.

border=0 Nike (USD 77.26 ; 4.76% ; NKE ; NKE.N)
On Thursday, Nike could deliver 1Q EPS of nearly $1, almost in line with last year on sales of $5.2bln vs $4.8bln. Two weeks ago, the Co launched its new Nike+ GPS App on the App Store. Recently, the Co's price target was raised to $95 ("outperform" rating unchanged) from $85 at Credit Suisse. Graphically, the stock broke above the key level at $75 last week and should challenge its $78.5 resistance before any further bounces towards $80.

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


Corporate Calendar September 20th - September 24th

Date

Market

Company

Event

 Monday, September 20th

 

US

Lennar Corp

3rd-Quarter results

 

US

Discover Financial Services

3rd-Quarter results

Tuesday, September 21st

 

US

Carnival

3rd-Quarter results

 

US

Adobe Systems

3rd-Quarter results

 

US

Autozone

4th-Quarter results

 

US

General Mills

1st-Quarter results

 

US

Cintas

1st-Quarter results

 

US

Conagra Foods

1st-Quarter results

border=0 Wednesday, September 22nd

 

SP

Inditex

1st-Half results

 

US

Red Hat

2nd-Quarter results

 

US

CarMax

2nd-Quarter results

 

US

Bed Bath & Beyond

2nd-Quarter results

border=0 Thursday, September 23rd

 

US

Nike

1st-Quarter results

border=0 Friday, September 24th

   

No major earnings expected

 


Economic Calendar (CET) September 20th - September 24th

Date

Market

Economic data

Period

Expected

Last

Monday, September 20th

10:30:00

UK

M4 Money Supply (MoM)

AUG

NA

0.4%

16:00:00

US

NAHB Housing Market

SEP

14

13

Tuesday, September 21st

10:30:00

UK

Public Sector Net Borrowing (Bln)

AUG

12.215

3.2

10:30:00

UK

Public Finances (PSNCR) (Bln)

AUG

7.9325

-4.133

14:30:00

US

Housing Starts (Thsd)

AUG

550

546

14:30:00

US

Bulding Permits (Thsd)

AUG

558

559

20:15:00

US

Fed: Rates decision

 

0.25%

0.25%

Wednesday, September 22nd

16:00:00

EC

Euro-Zone: Consumer Confidence

AUG

-10.3

-11

16:30:00

US

Crude Oil Inventories (WoW chg)

W37

NA

-2489

Thursday, September 23rd

08:45:00

FR

Business Confidence Indicator

AUG

98

98

08:45:00

FR

Production Outlook Indicator

AUG

NA

-2

14:30:00

US

Initial Jobless Claims (Thsd)

W37

452

450

16:00:00

US

Existing Home Sales (Mln)

AUG

4.19

3.83

16:00:00

US

Leading Indicators

AUG

0.1%

0.1%

Friday, September 24th

07:30:00

FR

GDP (QoQ)

3Q

0.6%

0.6%

08:00:00

GE

Import Prices (MoM)

AUG

NA

-0.2%

10:00:00

GE

IFO - Business Climate

SEP

106.4

106.7

14:30:00

US

Durable Goods Orders

AUG

-0.9%

0.4%

14:30:00

US

Durable Goods Ex Transportation

AUG

1%

-3.7%

16:00:00

US

New Home Sales (Thsd)

AUG

296.39

276

 

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