Market Outlook July 6th - 10th

Market Outlook

- US :

US markets fell for a third straight week, the longest losing streak since March, on concern deeper-than-estimated job cuts and a drop in consumer confidence will prolong the recession. Investors will take a close look at July's Michigan confidence index. Stocks from Insurance, Retailing, Real Estate, Media and Energy led the decline whereas Food & Beverage, Semiconductors and Automobiles rose. Technically, bearish divergences are still valid on daily indicators. Consequently, the downside risk still prevails in the short term.

- EUROPE :

European markets declined last week led by Basic Resources, Automobiles and Financial Services. On a technical point of view, European indices have escaped from their short term ascending channel. Consequently, further decline remains favoured in the coming days.

July 6th - July 10th

Market Round up

	Weekly chg (%)	Last
Dow Jones	-2.3	8280.7
Nasdaq 100	-2	1446.3
Dax Xetra	-5.2	4632.8
Cac 40	-3.7	3074.6

Foreign Exchange

Euro/dollar :

The pair is rebounding on its channel lower boundary but remains below its resistance, the RSI lacks upward momentum. SHORT below 1.44 towards 1.37 & 1.3250.

Dollar/yen :

The pair is posting a rebound but remains below its LT declining trend line. SHORT @ 101.20 with 94 & even 91 in sight.

Company preview

Pepsi Bottling (USD 33.8 ; 2.24% ; PBG ; PBG.N)
On Tuesday, Pepsi Bottling is expected to release 2Q EPS of $0.72 compared to $0.79 a year ago on sales of $3.4bln vs $3.5bln. In the news, the Co is expected to start distributing Rockstar drink in Mexico this month. Besides, the Co would acquire Abilene, a Texas bottler for appx. $200m. Technically, the stock bounced off from its key horizontal level at $32.5, being supported by its rising 50D MA. Hence, a further rise is more likely to $35 at first.

Alcoa (USD 9.86 ; -8.02% ; AA ; AA.N)
Wednesday, Alcoa may deliver a 2Q loss compared with a profit a year ago. Earlier, the US aluminium producer signed a contract with Noble Corp to buy deep-sea drilling technology for its expansion in oil & gas market. From a technical view, the stock remains supported by a medium-term rising trend line. Above $9.7, we expect the stock to further rise to $10.95 at first.

Family Dollar Stores (USD 27.95 ; -3.29% ; FDO ; FDO.N)
On the same day, Family Dollar Stores, a US discount store chain is scheduled to announce its 3Q results. Last month, the Co reaffirmed its 3Q EPS guidance of $0.54-$0.58 compared to analysts' expectations of $0.57 and $0.46 a year ago. Sales may also rise YoY, according to the consensus. Technically, since the stock is still capped by its falling 20D and 50D MAs as well as the $29.5 threshold, a further pullback should be in sight towards $26.7.

Progressive (USD 14.48 ; -3.4% ; PGR ; PGR.N)
On Friday, Progressive could report 2Q EPS of $0.36 in line with a year ago. Recently, the auto insurer's board approved a plan to repurchase up to 50m shares with an estimated value of $798.5m. From a technical view, the stock is currently testing a key resistance around $15.4. A short-term consolidation cannot be ruled out before a further up move to $16 as our first target.

Rockwell Collins (USD 40.2 ; -4.69% ; COL ; COL.N)
The same day, Rockwell Collins is expected to unveil 3Q EPS of $0.9 compared to $1.07 a year ago on sales of $1.1bln vs $1.2bln. Last week, the Co's venture with BAE Systems won $28.9m orders to provide MIDS-LVT to US and coalition forces from the US government. Technically, the stock continued to consolidate last week, backed by a threshold around $40. As long as the latter holds on the downside, we expect a rebound to $43.8 in the coming days.

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

Corporate Calendar

July 6th - July 10th

Date	Market	Company	Event
Wednesday, July 8th
	US	Alcoa	2nd-Quarter results
	US	Pepsi Bottling	2nd-Quarter results
	US	Family Dollar Stores	3rd-Quarter results
Friday, July 10th
	NO	DNB Holding	2nd-Quarter results
	US	Progressive	2nd-Quarter results

Economic Calendar (CET)

July 6th - July 10th

Date	Market	Economic data	Period	Expected	Last
Tuesday, July 7th
08:45:00	FR	Trade Balance (Mln)	MAY	NA	-3792
10:30:00	UK	Industrial Production (MoM)	MAY	0.1%	0.3%
10:30:00	UK	Manufacturing Production (MoM)	MAY	0.2%	0.2%
Wednesday, July 8th
01:01:00	UK	GDP Estimate (NIESR)	JUN	NA	-0.9%
11:00:00	EC	Euro-Zone: GDP (QoQ)	1Q	NA	-2.5%
12:00:00	GE	Industrial Production (MoM)	MAY	NA	-1.9%
16:30:00	US	Crude Oil Inventories (WoW chg)	W26	NA	-3660
21:00:00	US	Consumer Credit (Bln)	MAY	-7.83	-15.7
Thursday, July 9th
08:00:00	GE	Trade Balance (Bln)	MAY	NA	9.4
10:30:00	UK	Trade Balance Non EU25 (Mln GBP)	MAY	-3812.5	-4139
10:30:00	UK	Visible Trade Balance (Mln GBP)	MAY	-6680	-7003
13:00:00	UK	BoE: Rates decision		0.5%	0.5%
14:30:00	US	Initial Jobless Claims (Thsd)	W26	NA	614
16:00:00	US	Wholesale Inventories	MAY	-0.9%	-1.4%
Friday, July 10th
08:45:00	FR	Current Account (Mln)	MAY	NA	-3.1
08:45:00	FR	Central Govt. Balance (Bln)	MAY	NA	-71.922
10:30:00	UK	PPI - Output (MoM)	JUN	0.3%	0.4%
14:30:00	US	Trade Balance (Bln)	MAY	-30.144	-29.163
16:00:00	US	U. of Michigan Confidence	JUL	69.9	70.8

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