Market Outlook Oct 12th - 16th

Market Outlook

- US : The S&P500 jumped 4.5% last week helped by strong WoW gains in the Automobiles (+8.6%), Banks (+7.7%) and Energy (+7.5%) sectors. The Telecom Services sector (-2.5% WoW) was the main under performer over the week. Technically, the consolidation risk prevails as long as the S&P 500 does not clearly rise above its most recent high at 1080.15 in which case the down targets at 1030 and 1000/990 should remain valid. Otherwise, the rise above 1080 will open the way to 1100 and 1140. On the corporate side, 3Q earnings reports will accelerate this week.

- EUROPE : In Europe, the main indices have followed Wall Street's gain driven by shares in the Basic Resources, Automobiles & Parts and Construction & Materials sectors. From a technical point of view, the STOXX 600 index should remain under pressure below the 245/248 resistance area with targets at 235 and 230. Alternatively, above 248, target 260/262.

October 12th - October 16th

Market Round up

Foreign Exchange

Euro/dollar : The pair has struck against its MT bullish channel upper boundary but remains on the upside. LONG above 1.41 towards 1.4850 & 1.5250.

Dollar/yen : The pair is on the downside and is approaching its bearish channel lower boundary, the RSI is badly directed. SHORT @ 93 with 87 or even 84.20 in sight.

Company preview

Intel (USD 20.17 ; 6.33% ; INTC ; INTC.O)
On Tuesday, Intel is expected to release 3Q adjusted EPS of $0.27 compared to $0.38 a year ago on sales of $9bln vs $10.2bln. Recently, the Co unveiled the Intel Atom processor CE4100, the newest System-on-Chip in a family of media processors for Internet TV. From a technical point of view, the has stock rebounded above its 20D and 50D MAs last week and remains bullish. Therefore, as long as $19 holds on the downside, further advance should occur to a first target at $20.65 in the coming days then $22.0.

JP Morgan Chase (USD 45.85 ; 9.53% ; JPM ; JPM.N)
Wednesday, JPMorgan Chase may announce 3Q EPS of $0.49 compared with $0.32 a year earlier. Recently, the Financial Times reported that the Co's investment banking unit would seek to get more business overseas. Separately, the Co's price target was raised to $48 from $40 at Citigroup with a "hold" rating unchanged. Technically, the stock bounced strongly last week but is close to a key resistance area at $46.5, a ST consolidation cannot be ruled out above $43 before further rise to $50.

Nokia (EUR 9.93 ; 4.42% ; NOK1V ; NOK1V.HE)
On Thursday, Nokia could deliver 3Q net income of E470m, down from appx. E1.1bln a year ago on revenue of E10bln vs E12.2bln. Recently, the Co's venture, Nokia Siemens Networks received a contract from Unitech Ltd to build and manage a GPRS core network for the Uninor mobile carrier. In addition, the venture teamed up with the International Telecommunication Union to make telecommunications cheaper and more accessible worldwide. Technically, the stock is consolidating around its flat 50D MA and a major horizontal support at E9.50. Hence, further upside seems more likely to E10.5 and E10.85 in extension.

IBM (USD 125.93 ; 5.81% ; IBM ; IBM.N)
The same day in the US, IBM is expected to unveil 3Q EPS of $2.38 compared with $2.05 last year on sales of $23.4bln vs $25.3bln. A week ago, the Co won a $200m deal with India's Datacom Solutions to provide IT infrastructure and services. Earlier, the computer-services provider planned to launch a cloud-computing storage service. From a technical view, the Co remains positively oriented, backed by a rising trend line and 50D MA. Therefore, above $118 further rise seems likely to $130 and then to $140 in the coming weeks.

Bank of America (USD 17.5 ; 7.1% ; BAC ; BAC.N)
Friday, Bank of America may post a 3Q loss compared with last year's EPS of $0.19. Earlier this month, the US bank's CEO and president Ken Lewis announced his plan to retire, effective December 31, 2009 and the Board is continuing its search for his successor by that date. The stock was upgraded to "outperform" from "market perform" at Wells Fargo last week. Technically, the stock continued to consolidate within a trading range between $18.5 and $15.5 and may test its upper bound in the coming days.

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

Corporate Calendar October 12th - October 16th

Economic Calendar (CET) October 12th - October 16th