Market Outlook 24th August - August 28th

Market Outlook

- US : The S&P500 gained about 2.2% last week on optimism about the pace of the economic recovery and better than expected economic data. The rally was driven by strong gains in the insurance, health care equipment and energy sectors which outperformed the S&P by more than 1pt over the week. The automobile sector was the only one to decline on the week. From a technical point of view, the trend remains on the upside for now with no reversal signs in sight.

- EUROPE : In Europe, the main indices posted even stronger gains than in the US lead by strong gains in the utilities, construction & materials and oil & gas sectors. The auto sector was the only one lower on the week. As per the US, better than economic reports fuelled investors' enthusiasm. From a technical point of view, the outlook remains equally positive with no signs of weakness.

  August 24th - August 28th

Market Round up

Foreign Exchange

Euro/dollar : The RSI is challenging its MT rising trend line, the pair is pulling back on its support. LONG above 1.3750 towards 1.4460 & 1.4750.

Dollar/yen : The pair has struck against its LT bearish channel upper boundary as the RSI is badly directed. SHORT @ 97.00 with 93.50 or even 91 in sight.

Company preview

 Dexia (EUR 6.261 ; 1.28% ; DEXB ; DEXB.BR)
Wednesday, Dexia is expected to post 2Q net income of appx. E400m compared to E532m a year ago. Last week, the Co was downgraded to "hold" from "buy" at Deutsche Bank. Earlier, Fitch Ratings reaffirmed the Co's LT/ST IDR at "A+/F1+" with a stable outlook. From a technical view, the stock continued to consolidate above its rising 20D MA. We expect a test of the E6.5 threshold in the coming days before further advance to E6.95.

 Swiss Life (CHF 117.2 ; -0.26% ; SLHN ; SLHN.VX)
The same day, Swiss Life may announce 1H net income of SF150m compared with appx. SF1.6bln a year earlier. Earlier, the Co's IFS rating was downgraded to "BBB" from "BBB+" and long-term IDR to "BBB-" from "BBB" at Fitch Ratings. The rating Co said: "The downgrade reflects information in Swiss Life's recent market consistent embedded value disclosure and weak 2008 results reported earlier this year." Technically, the stock remains on the upside, backed by an ascending 20D MA. Hence, a further rise is more likely to SF123 and SF128.5 in extension.

 L'Or顬 (EUR 61.38 ; 1.39% ; OR ; OREP.PA)
On Thursday, L'Or顬 could deliver 1H net income of E1.1bln, down from E1.25bln a year ago. The worlds largest cosmetics maker has announced 2Q sales through June 30 up 2.6% to E4.4bln compared to E4.29bln a year earlier. Besides, CEO Jean-Paul Agon remained confident on the Co's performance to keep improving in 2009. Technically, the Co jumped last week and above E58, we expect a further up move towards E65.

 Dell Computer (USD 14.49 ; 2.04% ; DELL ; DELL.O)
On the same day, in the US, Dell Computer is expected to release 2Q EPS of $0.22 vs $0.33 a year ago on sales of appx. $12.6bln vs $16.4bln. The Co expects the computer industry to recover in 2010, according to Manager Magazin's report. Besides, the Co's price target was raised to $14.5 from $13 at UBS. From a technical view, the stock broke above a huge resistance at $14 last week and is expected to challenge $15.7 in the forthcoming days.

 Carrefour (EUR 32.12 ; 2.69% ; CA ; CARR.PA)
Friday, Carrefour may unveil 1H adjusted net income of E150m compared with E752m last year on sales of E41.2bln vs appx. E42bln. Recently, the Co planned to double the number of stores in Turkey to 300 by the end of 2011 and increase its workforce to 15,000 from 8,000. In addition, the Co also opened three Carrefour Express stores near Sao Paulo in Brazil. Technically, the stock bounced off from a major support level at E30 and also escaped on the upside from a short-term bearish trend line. Hence, a further rise should occur towards E33.6/34.

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

Corporate Calendar August 24th - August 28th

Economic Calendar (CET) August 24th - August 28th