Market Outlook June 8th - June 12th

Outlook

- US : US indices rose for a third week on further signs the economy is improving. U.S. employers eliminated fewer jobs in May than economists expectation, reinforcing signs that the deepest recession is abating. Stocks from Automobile & Parts, Capital Goods and Tech. hardware were among the best performers whereas Telecommunication, Healthcare shares lost ground wow.
Technically, even if US indices remain well oriented, friday's doji (on a candlestick chart) calls for caution in the short term.

- EUROPE : European markets closed higher last week. Oil fell below $68 a barrel on Monday after a stronger US dollar prompted some profit taking from a seven-month high last week. Stocks from Automobile & Parts, Basic Ressources, Insurance and Industrial Goods and services led the advance while Telecommunication and Utilities declined. On a technical point of view, the immediat momentum seems weak and some profit taking can not be ruled in the short term.

  June 8th - June 12th

 Market Round up

Foreign Exchange

Euro/dollar : The upside breakout of the 1.37 congestion area calls for further advance. Daily indicators remain on the upside. LONG above 1.37 towards 1.45 & 1.4750.

Dollar/yen : The pair is challenging its intermediary support at 94. The RSI is below a declining trend line. SHORT @ 97.20 with 91 & even 87 in sight.

Company preview

 Rio Tinto (GBp 2968 ; -0.47% ; RIO ; RIO.L)
Last Friday, Rio Tinto announced to raise appx. US$15.2bln in a rights issue following a rejection of Chinalco's $19.5bln investment plan. In addition, the Co agreed with BHP Billiton to set up a 50:50 production joint venture covering the entirety of both companies' Western Australian iron ore assets. Under the terms, BHP Billiton to pay the Co US$5.8bln for equity type interests at financial close to take its interest in the joint venture from 45% to 50%. Technically, the stock bounced off from its 50D MA but still remains capped by a huge resistance at 3200. Hence, a short-term consolidation cannot be ruled out before an upside breakout of 3200.

 Inditex (EUR 31.94 ; -0.09% ; ITX ; ITX.MC)
Wednesday, Inditex is expected to release its 1Q results. Net income could reach appx. E190m vs E219m a year ago on revenues of E2.3bln vs E2.2bln. Earlier, the Europes large clothing retailer appointed Ignacio Fernandez as its new CFO, replacing Antonio Rubio. Besides, the Co's price target was raised to E39.4 from E38.3 at Goldman Sachs. Technically, the stock is currently trading within a range between E30.8 and E34.3 and may test its upper bound in the coming days.

 Elekta AB (SEK 106 ; -0.47% ; EKTAB ; 0)
On the same day, Elekta may post FY net income of SK510m compared to SK411m a year ago on sales of appx. SK6.6bln vs SK5.1bln. Recently, Elekta reached an alliance agreement with Nucletron to market and license the Cos software system MOSAIQ. From a technical view, the shares remain supported by a medium-term horizontal level at 103. Above this level, a further bounce is therefore expected to 112.5 and 117 in extension.

 Brown Forman (B) (USD 45.54 ; 3.85% ; BF/B ; BFb.N)
The same day in the US, Brown Forman Corp could deliver 4Q EPS of $0.48 vs $0.62 a year earlier on sales of $638m vs $606m. Last week, the board declared a regular quarterly cash dividend of $0.2875 cents per share. Moreover, the Co's price target was raised to $43 from $41 at Goldman Sachs. Technically, the stock is still under pressure below its key resistance around $48.75. In which case, a further pullback towards $44 is more likely in the forthcoming days.

 National Semiconductor (USD 13.64 ; -1.73% ; NSM ; NSM.N)
On Thursday, National Semiconductor is scheduled to announce its 4Q results. The Co may report a slight loss compared to the year earlier's profit on sales down to $272m compared to $462m. From a technical point of view, the stock may be well forming a "rounding bottom" pattern and also currently holds above its 20D MA. As long as 12.7 serves as a support, a further up move should occur towards $16 in the medium-term.

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

Corporate Calendar June 8th - June 12th

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