Market Outlook January 11th - January 15th

Market Outlook

- US : US indices rose last week on optimism economic growth continue to recover. Shares in the Auto (+11.62%), Banks (+8.34%) and Diversified Financials (+6.47%) sectors led the market up. Technically, indices may continue to trade up this week as long as the S&P 500 holds above the 1115 area. The 4Q's earnings season kicks off today with Alcoa's results and should provide further insight about corporate earnings outlook going into 2010.

- EUROPE : European markets traded up last week driven by gains in Basic Resources (+6.28%), Banks (+6.2%) and Technology (+4.31%) sectors. From a technical point of view on the Stoxx 600, the break of the 250 area has opened the way to further upside to 270.

  January 11th - January 15th

Market Round up

Foreign Exchange

Euro/dollar : The pair has broken below its MT bullish channel lower boundary and is shaping a bearish flag. SHORT below 1.4850 towards 1.40 & 1.3750.

Dollar/yen : The pair has broken above its MT bearish channel upper boundary and should post a further up move. LONG @ 88 with 95 or even 97.50 in sight.

Company preview

KB Home (USD 15.97 ; 16.74% ; KBH ; KBH.N)
On Tuesday, KB Home is expected to report a 4Q LPS on sales of appx. $590m. The stock was recently upgraded to "outperform" from "neutral" at Credit Suisse. Technically, the stock surged with a bullish gap last week helped by better than expected results from Lennar Corp. The breakout of the $16.2 resistance should trigger further upside acceleration towards $16.8 and then $18.

Beiersdorf (EUR 44.38 ; -3.37% ; BEI ; BEIG.DE)
On Wednesday, in Europe, Beiersdorf may deliver FY net income of appx. E400m compared to E562m a year earlier on revenue of E5.8bln vs around E6bln. Recently, the German personal care products maker forecast good growth potential despite the financial downturn and also to focus on its core brands. From a technical point of view, the price collapsed last Friday following a breakout of a key upside trend line. The risk now is a slide below E43.5 & even E41.5.

Sig Plc (GBp 125.2 ; 11.69% ; SHI ; SHI.L)
The same day, SIG Plc, the UK supplier of insulation and roofing, could announce FY pre-tax profit of appx. £45m compared with £33.1m a year ago on revenue of £2.7bln vs £3.1bln. Earlier, the Co's price target was cut to 160p from 178p at Goldman Sachs. From a chartist view, the stock broke above a MT bearish trend line and also extended its rise last week, backed by increasing volume. As long as 118p holds on the downside, further advance should be in sight to 133p and 142p in extension.

Intel (USD 20.83 ; 2.11% ; INTC ; INTC.O)
Thursday, Intel is expected to announce 4Q EPS of $0.46 compared to $0.18 last year on sales of $10.1bln vs $8.23bln a year ago. Recently, the Co announced new Intel Atom processors, enabling improved performance and smaller, more energy-efficient designs in a new generation of netbooks and Atom-based entry level desktop PCs. The Co was recently upgraded to "overweight" from "equal weight" at Barclays. Technically, the stock is holding above its ascending 20D MA, as long as $19.8 remains a support the stock can continue its rise to $22.

JP Morgan Chase (USD 44.68 ; 7.22% ; JPM ; JPM.N)
On Friday, JPMorgan Chase may unveil 4Q EPS of $0.61 compared to a loss announced in the same period last year. From a technical point of view, the stock reversed up at the end of December after a two months consolidation phase. The technical indicators show that the upside momentum remains strong, therefore, we expect a further up move to challenge its last swing high at $47.5 and possibly $50 in extension.

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

Corporate Calendar January 11th - January 15th

Economic Calendar (CET) January 11th - January 15th