Market Outlook August 8th - 12th

Market Outlook

- WALL STREET:
US indices lost ground last week, taking part in a massive sell-off on global financial markets. On the economic front, US unemployment rate fell to 9.1% (9.2% expected) in July, while factory orders dropped 0.8% in June as expected. In other news, S&P's downgraded the US LT debt rating to "AA+" from "AAA" with a "negative" outlook. Regarding corporate releases, AIG posted a 2Q net income of $1.8B vs a net loss of $2.7B a year ago. All sectors declined, with real estate (-11.69%) and automobiles & components (-11.05%) posting the weakest performance, while energy, banks, diversified financials and materials lost over 9%. From a chartist view, the S&P500 index is accelerating on the downside after the breakout of the lower boundary of its MT range pattern. Next down targets are set at 1130 and 1100.

- EUROPE:

  August 8th - August 12th

 Market Round up

 Foreign Exchange

Euro/dollar : the pair has struck against its declining trend line but stands above its support. LONG above 1.395 towards 1.4700 & 1.4900.

Dollar/yen : the pair has broken below its support and is approaching its previous low. SHORT below 79.5 with 76.50 or even 75.30 in sight.

Company preview

 International Power (GBp 288.5 ; -5.04% ; IPR ; IPR.L)

 Walt Disney (USD 35.18 ; -8.91% ; DIS ; DIS.N)
The same day in the US, Walt Disney may deliver 3Q EPS of $0.72 compared to $0.67 a year earlier on sales of $10.5B vs $10B. At the end of last month, the Co offered about $22.68 (1,000 rupees) a share to buy the remaining 49.6% stake it does not already own in UTV Software Communications, an Indian media company. Technically, the shares collapsed last week, as the price broke below its former support around $37.80. The ST outlook is bearish with a first target at $33.

 TUI Travel (GBp 172.4 ; -10.95% ; TT/ ; TT.L)
On Wednesday, TUI Travel, the UK-based leisure travel group, could announce a 2Q loss before interest and tax of £297M compared with an operating loss of appx.£190M a year ago. Earlier, the Co's price target was cut to 185p from 240p at Citigroup. From a chartist view, the shares remain capped by the falling 20-day moving average. The recent breakout of the support threshold at 180p should trigger a new decline towards 155p.

 Cisco Systems (USD 14.94 ; -6.45% ; CSCO ; CSCO.O)
On the same day, Cisco Systems is expected to post 4Q EPS of $0.38 compared to $0.35 a year earlier on sales of around $11B vs $10.8B. Recently, the Co was upgraded to "buy" from "neutral" at Goldman Sachs. Earlier, the Co could consider cutting staff and selling assets to reduce annual expenses. From a technical view, the stock remains on the downside, capped by a MT bearish trend line. Below $16, the risk of the break down $14 remains high.

 Swisscom (CHF 364.3 ; -4.01% ; SCMN ; SCMN.VX)
On Thursday, Swisscom, the Swiss telecom company, could deliver 2Q net income of SF503M compared to SF493M a year ago on sales of SF2.9B vs appx. SF3B. Earlier, the Co's stock was upgraded to "buy" from "hold" at Deutsche Bank. From a technical point of view, the stock price is still negatively oriented. The descending 50D MA maintains selling pressure and should continue to push the price lower towards SF350.

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

Economic Calendar (CET) August 8th - August 12th