Finance Report & Market Outlook | International Stock Market Review

Market Outlook

- WALL STREET:
US indices closed mixed last week. On the US economic front, 4Q GDP rose 2.8% QoQ vs 3.0% expected. Also, the University of Michigan Confidence index for January rose to 75.0 from 69.9 in December. The Federal Reserve said last week it expects to keep interest rates "exceptionally low" until at least late 2014. Looking at company results, Procter & Gamble unveiled 2Q core EPS at $1.1 vs $1.08 expected. Ford Motor posted 4Q revenue at $34.6B vs $32.5B in the same period a year ago. Chevron reported 4Q net income that fell to $5.1B from $5.3B a year ago. Looking at sectors, real estate, technological hardware & equipment, and consumer durables climbed over 2% while telecommunications, banks and household & personal care products were among the weakest sectors. From a technical perspective, the S&P 500 index is forming a rising wedge pattern, which should trigger a consolidation movement towards 1272, as the index approaches its 1350 resistance.

- EUROPE:
The FTSE 100 index edged up by 0.09% over the past week. Graphically, the index remains supported by a ST rising trend line, and is expected to post a limited upside to 5800 and 5835 in extension. Looking at statistics, UK 4Q GDP rose 0.8% YoY as expected vs 0.5% for Q3, while Euro zone PMI composite was 50.4 in January, better than expected (48.5). Regarding the stocks, Ericsson and Novartis posted disappointing earnings while Nokia smartphones shipments in December quarter beat estimates. In Europe, the DAX and the IBEX 35 rose 1.68% and 1.11% respectively, while the SMI index lost 1.46% over the past week. As for European sectors, banks, basic resources, and financial services rose most while health care, technology, and telecommunications had the worst performance. Technically, the Stoxx600 index is supported by a mid-term rising trend line, may test its 251 resistance before further upsides towards 262 and 273.

  January 30th - February 3rd

 Market Round up

 Foreign Exchange

Euro/dollar : the pair remains within a bearish channel and is challenging its resistance. SHORT position below 1.32 with 1.26 & 1.24 in sight.

Dollar/yen : the pair stands below its resistance which maintains a bearish bias. SHORT position below 79.5 with 75.5 & 73.75 in sight.

Company preview

 BSkyB (GBp 676 ; -0.59% ; BSY ; BSY.L)
Tuesday, BSkyB could unveil 2Q pretax income of £270.2M, down from £237M a year earlier on revenue of £1.73B vs £1.66B. Earlier this month, the British broadcasting firm entered into a strategic partnership with zeebox, to offer "augmented" TV viewing features on tablet computers and smartphones this year. Technically, the stock is posting a rebound but stands below its new resistance (former support) at 700p. Further weakness is therefore likely below this level with 630p as a first target.

 Amazon.com (USD 195.37 ; 2.33% ; AMZN ; AMZN.O)
In the afternoon, Amazon is expected to report 4Q EPS of $0.47, vs $0.91 in 4Q10, on sales of $18.2B, compared to $12.9B in the previous year. On December 29, the online retailer said its Kindle Fire, Kindle Touch and Kindle held the top three spots on the Amazon.com best seller charts, during the 2011 Christmas season. From a technical point of view, the stock is shaping a rounding bottom which will be validated with the breakout of the $200 resistance. In this case, further advance will be likely with $220 as a first target and $245 in extension.

 Roche (CHF 156 ; -4.29% ; ROG ; ROG.VX)
On Wednesday, Roche may deliver FY net income of SF10.5B, compared with SF8.89B a year ago, on sales of SF42.7B, down from SF47.5B. Last week, the Swiss pharmaceutical firm launched an unsolicited offer to acquire California-based Illumina for $44.50 per share in cash or appx. $5.7B. Technically, the stock is facing a weakness but stands above its new strong support at SF150. A rebound on this level is likely and would lead to SF166 at first (previous high). A break below SF150 will open the way to SF140 at first.

 Whirlpool (USD 54.6 ; 0.76% ; WHR ; WHR.N)
On the same day, Whirlpool could release 4Q EPS of $1.69, down from $2.19 in the same period of 2010, on sales of $4.98B, vs $5.04B. On January 9, the US appliance maker said it would introduce four connected appliances over the next 18 months, including a refrigerator, dishwasher, washer and dryer, a closed move towards the introduction of "smart" appliances by 2016. From a technical perspective, the stock is posting a rebound but stands below its resistance at $60. A consolidation is therefore expected below this level with $45 as first target.

 Royal Dutch Shell B (GBp 2297 ; -4.25% ; RDSB ; RDSB.L)
Thursday, Royal Dutch Shell could post FY pretax income of £5.15B, vs £7.13B a year earlier. Last month, the Co's JV with PetroChina, Arrow Energy Holdings, has obtained approval of 95.25% of shareholders of Australia's Bow Energy for its takeover bid. Technically, the stock remains supported by a rising trend line since August 2011. Therefore, as long as the stock stands above this trend line, further advance is in the cards with 2500p (previous high) as a first target. Alternatively, a break below the 2200p threshold will open the way to 2000p.

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

Corporate Calendar January 30th - February 3rd

Economic Calendar (CET) January 30th - February 3rd