Market Outlook Sept 7th - Sept 11th

Market Outlook

- US : The S&P500 consolidated last week but managed to regain most of its losses on Thursday and Friday on optimism about future economic growth. Shares in the Diversified Financials, Banks, Insurance and Real Estate sectors were the weakest again the main index. On the upside, Food & Staples, Retail, Transportation, Food & Beverage and Health Care Equipment shares outperformed by more than two points the S&P 500. The failed attempt of the VIX index to maintain above 27 allows to keep a positive stance on equity markets for now.

- EUROPE : In Europe, the main indices posted even stronger losses than in the US, lead declines in the Insurance, Banks and Automobiles & Parts sectors. The Technology and Oil & Gas sectors outperformed the STOXX 600 by more than 1 point. From a technical point of view, the outlook remains equally positive, however the break of last week low around 228.5 may signal a 3 to 5% consolidation.

September 7th - September 11th

 Market Round up

 Foreign Exchange

Euro/dollar : The pair has struck against its resistance and should pull back on its support before a new up move. LONG above 1.3750 towards 1.4460 & 1.4750.

Dollar/yen : The pair is on the downside and should face a further weakness as the RSI is badly directed. SHORT @ 97.00 with 91 or even 88.50 in sight.

Company preview

 Del Monte Foods Co (USD 11.24 ; 7.05% ; DLM ; DLM.N)
Last week, Del Monte Foods reported 1Q first quarter net sales growth of 12% to $813.7m driven "primarily by fiscal 2009 pricing actions taken to recoup some of the inflationary cost-driven margin contraction experienced over the past few years coupled with solid base unit volume gains." The Co had a profit of $0.30 per share ($0.04 profit expected) vs a loss of $0.04 per share a year ago. The Co raised its FY10 EPS from continuing operations guidance to $0.88-$0.92 from $0.76-$0.80 ($0.8 consensus). The Co maintained its FY sales growth target at 4%-6% from the $3.6bln reported last fiscal year ($3.8bln consensus or +5.5%). Above $10.25 the stock can continue its up trend to $12.94 (historical high) and possibly higher.

 Pernod-Ricard (EUR 51 ; -5.1% ; RI ; PERP.PA)
Last week, Pernod-Ricard, the world's co-leader in wines and spirits, delivered FY 2008/09 sales of E7.2bln, up 9% YoY and in line with the consensus. Profit from recurring operations reached E1.85bln, up 21% YoY or a 4% rise in organic growth. Net profit group share totaled E945m, a 13% YoY increase. "For 2009/10, Pernod Ricard anticipates a general economic environment that will remain difficult and an overall stagnation of the Wines & Spirits industry, with contrasting situations depending on countries and categories. The comparison basis of the 1H, and in particular that of the 1Q will be unfavourable, due to the very strong performance reported over the 1H of the 2008/09 financial year. Conversely, the comparison basis of the 2H of 2009/10 will be favourable, due to a 2H 2008/09 adversely affected by the impact of the crisis and a strong destocking effect." Below the E55 resistance, the stock should remain under pressure and a slide to E48-E47 very likely.

 Morrison Supermarkets (GBp 285.3 ; 4.35% ; MRW ; MRW.L)
On Thursday, Morrison Supermarkets is expected to post 1H pre-tax profit of £360m compared to £309m a year earlier on revenue of £7.5bln vs £7.1bln. Recently, the Co said it planned to add 7,000 jobs during 2009, more than an initial target of 5,000. Besides, the Co's price target was raised to 300p from 260p at Deutsche Bank. Technically, the stock rebounded strongly last week following a breakout of the 275p threshold. Hence, we expect a further bounce towards 300p after a short-term consolidation then 330p. Below 270p the risk would be a return to 255p.

 National Semiconductor (USD 15.72 ; 2.34% ; NSM ; NSM.N)
On the same day in the US, National Semiconductor, a leader in analog power management technology, may announce 1Q EPS of $0.08 compared to $0.33 a year ago. Sales could drop to appx. $300m from $466m the same period last year. From a technical point of view, the stock is currently testing a key resistance level around $16, backed by its 20D MA. If broken out, a bullish acceleration should occur to $16.7 and $18.0 in extension. On the downside, the penetration of $15 would open the way to $14 and $13.5.

 Campbell Soup (USD 31.19 ; -0.7% ; CPB ; CPB.N)
Friday, Campbell Soup, the US food producer, is expected to release 4Q EPS of $0.26 in line with last year's level on sales of $1.52bln vs $1.7bln. Recently, the Co's price target was raised to $32 from $28 with a "neutral" rating unchanged at UBS. Technically, the stock remains positively oriented above its ascending 50D MA ($30.4). Therefore, we are bullish and expect a test of the nearest resistance at $31.6 before a further up move to $32.5 and then to $33.8.

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

Corporate Calendar September 7th - September 11th

Economic Calendar (CET) September 7th - September 11th