Market Outlook November 23rd - 27th

Market Outlook

- US : US indices were mixed last week, the Dow Jones rose 0.46% while the S&P 500 fell 0.19%. They remain close to strong resistance levels which calls for caution.
Sectors that posted the biggest WoW gains were Pharma. & Bio. (+3.01%), Materials (+1.44%) and Banks (+1.33%). While decliners were in the Media (-1.46%), Semiconductors (-2.67%) and Cons. Durables (-3.09%) sectors. Thanks Giving will be celebrated Thursday there market activity should be low with possibly large price swings.

- EUROPE : In Europe, consolidated more sharply than in the US. The dollar's weakness remains a source of concern for European economies. Shares in the Retail (-2.72%), Travel & Leisure (-3.07%) and Banks (-3.56%) sectors led the decline. Shares in the Chemicals (+0.34%), Basic Resources (+0.31%) and Utilities (+0.11%) managed to close up WoW. Technically, the outlook remains uncertain around the current level with the 250/52 area on the Stoxx 600 index a key level to break for further upside.

  November 23rd - November 27th

 Market Round up

 Foreign Exchange

Euro/dollar : The pair is on the upside and is challenging its resistance, the RSI is turning up. LONG above 1.4450 towards 1.5250 & 1.58.

Dollar/yen : The pair remains within a bearish channel and is approaching its next support, the RSI is badly directed. SHORT @ 93 with 87 or even 84.20 in sight.

Company preview

 Severn Trent (GBp 990.5 ; -0.45% ; SVT ; SVT.L)
Tuesday, Severn Trent, the UK utility company, is expected to report its 1H results. Last year the Co reported pre-tax income of £29.7m on revenue of around £828m. Recently, the Co's price target was cut to 905p from 1230p at Morgan Stanley with an "underweight" rating unchanged. From a technical point of view, the shares currently consolidates after an upside breakout of a MT declining trend line. Above 970p, a further bounce will probably occur to 1030p and 1080p in extension.

 Porsche Pref (EUR 52.29 ; -4.2% ; PAH3 ; PSHG_p.DE)
On Wednesday, Porsche may announce a FY net loss of E2.2bln on revenue of E6.5bln. In 2008, the Co posted FY net income of E6.3bln and revenue of E7.45bln. Last week, Volkswagen's supervisory board approved contracts related to a planned merger with the Co. The Co's price target was raised to E69 from E64 at Credit Suisse. Technically, the Co remains under pressure below a key resistance at E55.5 and the risk is now a slide below E50, which should trigger a bearish acceleration towards E47 at first.

 Tiffany & Co (USD 41.3 ; -2.23% ; TIF ; TIF.N)
The same day in the US, Tiffany & Co, a jewelry and specialty manufacturer and retailer, is expected to release 3Q EPS of $0.23 vs $0.35 a year ago on sales of $570m vs $618m. A week ago, the Co's board declared a regular quarterly dividend of 17 cents per common share. Earlier, the Co planned to cut jewelry prices in Japan by 5%. Technically, the stock is currently supported by its 50D MA. As long as $38.5 holds on the downside, we expect a new rally in the coming days to $43.5 and then to $46.

 Mitchells & Butlers (GBp 250 ; -4.14% ; MAB ; MAB.L)
Thursday, Mitchells & Butlers could report FY profit before tax of £122m compared to a loss of £238m a year ago on sales of £1.9bln unchanged YoY. Recently, the pub and restaurant operator said it would seek a new non-executive director as a successor to its chairman in the next few months. The stock was rated "overweight" at HSBC with a price target of 320p. From a chartist view, the stock price remain capped by the upper boundary of a MT descending channel. Below 262p, look for a further pullback to 226.5p at first in the coming weeks.

 Carphone Warehouse (GBp 201.2 ; -1.57% ; CPW ; CPW.L)
On Friday, Carphone Warehouse is expected to repot its 1H results. The Co reported a year ago pre-tax loss of £11m on revenue of £697m. Recently, the UK telecom-to-retail group agreed to buy Tele2 Mobile France for E56m through its Virgin Mobile France venture. Technically, the stock is still on the upside, backed by a major horizontal support around 192p. Even if a short-term consolidation cannot be ruled out now, we favour a further rebound to challenge its 211p resistance in the near future.

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

Corporate Calendar November 23rd - November 27th

Economic Calendar (CET) November 23rd - November 27th