II :: Internaxx Market Outlook 25 September 2008

Wolseley (GBp 414 ; -2.13% ; WOS ; WOS.L)

On Monday, Wolseley Plc, the UK plumbing and heating equipment distributor, may post FY pre-tax profit of appx. £435m vs £634m a year earlier on sales of appx. £16.3bln vs £16.2bln. Last week, the Co was downgraded to "sell" from "hold" at Citigroup. Year to date, the stock is down appx. 42% vs a 22.6% decrease for the Dow Jones EUROPE STOXX Retail Index and could continue to underperform its sector. Technically, the stock rebounded last week but remains under pressure. We expect a pullback to test 380, if broken, look for further drop towards 350 at first.

Smiths Group (GBp 1108 ; 4.63% ; SMIN ; SMIN.L)

Wednesday, Smiths Group, a British technology company, is expected to post FY pre-tax profit of £362m vs £256m a year earlier on revenue of £2.3bln vs £2.16bln. Recently, the Co selected AT&T as its world-wide communications provider with a 5yrs contract and expect annual cost savings of $25m from the cooperation. Year to date, the stock has increased 3.5% vs a 22.5% decrease for the Dow Jones EUROPE STOXX Technology Index. Technically, the stock has crossed above its 50D MA, but still remains under pressure below 1140p. A break of the 1080p support would increase the downside risk to 1000p and 960p in extension.

Nike (B) (USD 63.7 ; 2.88% ; NKE ; NKE.N)

In the US on the same day, Nike may deliver 1Q EPS of $0.93 compared to $0.92 a year ago on sales of $5.2bln vs appx. $4.65bln. Recently, the Co named Cindy Davis as the President of Nike Golf. Year to date, the stock is up appx. 4.3% vs a nearly 1.6% drop for the S&P 500 Household & Personal Products Index and could extend its out performance. Technically, the stock rebounded strongly last week but is under pressure within a key resistance area of $65. Hence, a ST consolidation should be in sight before further rise.

Bed Bath and Beyond (USD 32.76 ; 2.18% ; BBBY ; BBBY.O)

The same day, Bed Bath & Beyond, the US chain of retail stores, may report 2Q EPS of $0.46 compared to $0.53 a year ago on sales of $1.85bln vs appx. $17.7bln. Year to date, the stock is up appx. 23.3% vs a 6.1% increase for the S&P 500 Retailing Index and may continue to outperform its sector. Graphically, the shares rebounded last week above their 20D MA and a strong support around $30.5 may limit the downside risk. Hence, as long as $30.5 remains support, further rise could be in sight with a first target at $34.

Jabil Circuit (USD 11.24 ; -11.71% ; JBL ; JBL.N)

On Friday, Jabil Circuit, the US manufacturing services provider, is expected to post 4Q EPS of appx. $0.3 compared with $0.26 a year earlier on sales of around $3.3bln vs $3.1bln. Last week, the Co's price target was cut to $13 from $16.5 at Citigroup. Year to date, the stock dropped appx. 16.5% vs a 14.6% decline for the S&P 500 Electronic Manufacturing Services Index and may continue to underperform its sector. From a technical view, the shares consolidated last week after a big collapse. Below $13, the risk is now a slide to $10, a strong support level.