Market Outlook November 9th - 13th

Market Outlook

- US : Despite the unemployment rate reached a 26-year high, US stocks gained last week on better-than-expected economic reports and analysts upgrades of General Electric and Amazon.
Shares in the Transportation (+9.06%), Automobile (+8.87%) and Health Care (+5.94%) sectors led the rise.
The Real Estate (-0.50%) and the Food & Staples retail (-0.58%) sectors were the only sectors to decline WoW.
Technically on the S&P 500, As long as 1100 is not broken up, we favour a down move with 1020 and then 978 as next targets. The daily technical indicators are bearish but are close to supports.

- EUROPE : In Europe, stocks rebounded from a one-month low as better-than-expected earnings at companies from Swiss Re to Delahaize reinforced investor's trust in a new rally.
Shares in the Basic Resources (+6.62%), Retail (+5.83%) and Travel & Leisure (+4.84%) sectors were the best performers.
More defensive shares in the Food & Beverage (-0.16%), Health Care (+1%) and Telecommunications (+1.28%) sectors were not favorized by investors.
From a technical point of view, as long as 250 is not broken up, we favour a down move with 235 and then 231 as next targets

November 9th - November 13th

 Market Round up

 Foreign Exchange

Euro/dollar : The RSI is turning up, the pair remains within a bullish channel and has rebounded on its new support. LONG above 1.4450 towards 1.5250 & 1.58.

Dollar/yen : The pair has rebounded on its support and should be capped by its next resistance. SHORT @ 93 with 87 or even 84.20 in sight.

Company preview

 Vodafone (GBp 136.85 ; 0.48% ; VOD ; VOD.L)
Tuesday, Vodafone Group is expected to post 1H pre-tax profit of 5.23bln vs 3.31bln a year ago on revenue of 21.7bln vs around 20bln. Last week, the Co's venture, Vodafone Qatar delivered 6mths EBITDA loss of 152.6m riyals and expected to return to profit by end of fiscal 2011. Separately, the group was rated "equal-weight" at Barclays. Technically, the stock remains capped by a ST declining trend line. Below 145, a further pullback is more likely to 130 and 124.5 in extension.

 ING Groep (EUR 9.575 ; 8.06% ; INGA ; ING.AS)
On Wednesday, ING Groep is scheduled to release its 3Q results. The Co expects to post an underlying 3Q net result of appx. E750m compared to last year's loss. Earlier, the Co planned to raise E7.5bln in a rights issue and sell its insurance units. In addition, Moodys also downgraded the IFS ratings of the Cos US life insurance operating units to "A2" from "A1". Technically, the bias remains extremely bearish for the stock. We expect a further down move to E8.5 and then to E8 after a ST consolidation.

 Telefonica (EUR 19.255 ; 0.6% ; TEF ; TEF.MC)
Thursday, Telefonica may deliver 3Q net income of E2.27bln compared to E2bln a year ago on revenue of E14.3bln vs appx. E15bln. Last week, the Co agreed to acquire Telecom Italia's German broadband unit, Hansenet Telekommunikation for E900m. Earlier, the Co's price target was raised to E22.1 from E19.5 at Goldman Sachs. From a technical view, the stock has been trading within a range between E19.5 and E18.5 and may test the upper boundary in sight.

 Wal-Mart (USD 51.25 ; 3.16% ; WMT ; WMT.N)
The same day in the US, Wal-Mart is expected to announce 3Q EPS of $0.81 vs $0.77 a year earlier on sales of $99.7bln vs $98.6bln. Recently, the Co said it would invest $150m in Argentina in 2010 to expand operations. In addition, the Co expected sales growth to accelerate next year. Graphically, the stock bounced on a medium-term rising trend line last week and should test its nearest resistance at $52 before a further bounce to a first target at $54.3.

 Richemont (CHF 30.46 ; 6.13% ; CFR ; CFR.VX)
On Friday, Richemont, the luxury goods manufacturer and retailer, could unveil 1H net income of E279m compared to E866m a year ago on sales of E2.4bln vs E2.8bln. Earlier this month, the Co's jewelry brand Van Cleef & Arpels planned to add and also renovate stores in Japan. The Co's price target was cut to SF30.5 from SF32 at BofA-ML. From a technical point of view, the stock bounced off from a MT rising trend line's support. A test of a major resistance at SF31.5 is therefore expected in the coming days before any further upsides.

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

Corporate Calendar November 9th - November 13th

Economic Calendar (CET) November 9th - November 13th