Market Outlook Sept 21st - Sept 25th

Market Outlook

- US : The S&P500 gained more than 2% last week and reached a new high for the year driven by strong WoW gains in the Real Estate (+9.4%), Banks (+5.6%), Cons. Durables (+5.6%) and Capital Goods (+5.3%) sectors. The main underperformers were the Semiconductors, Transportation, Food & Staples Retail and Automobiles sectors. Technically, above 1032 on the S&P 500 the immediate trend is up with 1100 in sight. The VIX did not make a new low for the year indicating that investors are getting more cautious as the S&P 500 heads to 1100.

- EUROPE : In Europe, the main indices followed Wall Street's lead with gains ranging from 0.2% for the OMX in Sweden to 3.2% for the FTSE 100 in the UK. Shares in the Banks, Construction & Materials, Chemicals and Media sectors led the rise. There was some profit taking in the Personal & Household Goods and Travel & Leisure sectors. From a technical point of view, the outlook remains positive. On the STOXX 600, above 238 we may have 250 and 260/262 in sight.

  September 21st - September 25th

 Market Round up

 Foreign Exchange

Euro/dollar : The pair remains well directed and is challenging its MT bullish channel upper boundary, the RSI is still on the upside. LONG above 1.4050 towards 1.4750 & 1.5250.

Dollar/yen : The pair is on the downside and is approaching its bearish channel lower boundary, the RSI is badly directed. SHORT @ 94.70 with 88.50 or even 87 in sight.

Company preview

 Carnival (USD 32.26 ; -1.19% ; CCL ; CCL.N)
Tuesday, Carnival Corp is expected to release 3Q EPS of $1.18 compared with $1.63 a year earlier on sales of appx. $4.1bln vs $4.8bln a year ago. Last week, Goldman Sachs removed the Co from its "conviction sell" list while maintaining its "sell" rating. From a technical point of view, the stock is currently testing the upper boundary of a medium-term rising channel. In which case, a short-term consolidation cannot be ruled out before further advance to $36.2 at first. The key support is at $30.

 Paychex (USD 29.68 ; 3.89% ; PAYX ; PAYX.O)
On Wednesday, Paychex may release 1Q EPS of around $0.34 compared to $0.41 a year ago. Analysts also expect the Co's sales to drop to $504m from last year's $534m. Recently, the Co price target was raised to $24 from $23 at Barclays Capital. From a technical view, the stock price rebounded strongly following a breakout of its former resistance at $28.7, but is clearly "overbought" now. Hence, we are cautiously positive and expect to test a key horizontal level at $30 before $31.5 where some profit taking may occur.

 Bed Bath & Beyond (USD 39.28 ; 7% ; BBBY ; BBBY.O)
The same day, Bed Bath & Beyond, a nationwide chain of retail stores in the US, is expected to unveil 2Q EPS of $0.46 compared to $0.46 a year ago on sales of $1.9bln vs $1.8bln a year ago. Earlier, the Co's price target was increased to $39 from $34 at Bank of America. Technically, the stock surged last week, backed by its upside 20D MA. As long as $36.5 holds on the downside, a further bounce is likely to $41.5 and $43 in extension.

 Hennes & Mauritz (B) (SEK 410 ; 3.93% ; HMB ; HMb.ST)
On Thursday, Hennes & Mauritz AB could announce 3Q net income of SK3.4bln compared to SK3.3bln a year ago on revenue of around SK24.4bln vs SK20.9bln. Last month, the Europe's largest clothing retailer reported July total sales up 7% YoY and sales at shops open at least a year down 3%. Technically, the stock bounced off from its 100D MA's support and is expected to challenge a key resistance zone between 420 and 432 in the forthcoming days.

 KB Home (USD 20.21 ; 8.07% ; KBH ; KBH.N)
Friday, KB Home, the US home builder, may deliver 3Q LPS of $0.67 compared with a loss of $0.35 per share a year earlier on revenue of $454m vs $681m. Recently, the Co announced to resume its homebuilding operations in the Mid-Atlantic region, including Maryland and Virginia. In addition, the Co was upgraded to "overweight" from "neutral" at JPMorgan. Technically, the stock has just broken above a major resistance at $19.5. Hence, above $19, a further up move is expected to $22.5 and $24 in extension.

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

Corporate Calendar September 21st - September 25th

Economic Calendar (CET) September 21st - September 25th