Market Outlook September 14th - 18th

Market Outlook

- US : The S&P500 rose nearly 4% last week and reached a new high for the year driven by strong WoW gains in the Media (+9%), Real Estate (+8.5%), Transportation (+7.5%) and Capital Goods (+6.2%) sectors. No sector closed Friday lower on the week but the main underperformers were the Retailing, Food & Staples Retail and Utilities sectors. Technically, above 1016 on the S&P 500 the immediate trend is up. The VIX fell to its lowest level of the year last week.

- EUROPE : In Europe, the main indices recorded a gain of 2% (Ibex in Spain) to 5% (AEX in Amsterdam). Shares in the Travel & Leisure, Basic Resources, Automobiles & Parts and Industrial Goods & Services led the rise. As in the US, no sector closed lower on the week, we saw some profit taking in the Banking sector earlier in the week, calling for caution there. From a technical point of view, the outlook remains positive. Above 234 we may have 250 and 260/262 in sight.

September 14th - September 18th

 Market Round up

 Foreign Exchange

Euro/dollar : The pair is breaking above its resistance and should post a further up move as the RSI is well directed. LONG above 1.3750 towards 1.4750 & 1.5250.

Dollar/yen : The pair is on the downside and is challenging its support, the RSI is badly directed. SHORT @ 97.00 with 91 or even 88.50 in sight.

Company preview

 Adobe Systems (USD 34.65 ; 10.03% ; ADBE ; ADBE.O)
Tuesday, Adobe Systems is expected to release 3Q EPS of $0.33 compared to $0.42 a year ago on sales of $687m vs $887.3m. Recently, the Co announced to update its Scene7 platform with dynamic media and web-to-print enhancements. Last week, the Co's price target was raised to $35 from $34 at Bank of America. Technically, the stock bounced off from its 50D MA and also broke above a former major resistance at $33.5. Hence, a further bounce is more likely to $36.2 and $37.6 in extension.

 Best Buy (USD 39.76 ; 0.28% ; BBY ; BBY.N)
On the same day, Best Buy Co may release 2Q EPS of appx. $0.42 compared with $0.48 a year ago on sales of $10.7bln vs $9.8bln. Earlier, the Co planned to open 22 new Best Buy stores in the US during the 3Q 2010. Separately, the stock price target was raised to $46 from $41 at Credit Suisse. From a technical view, the stock is currently consolidating below its medium-term resistance at $41.5 following successive bounces. Therefore, we expect a re-test of this key level in the coming days before further upsides to $43.4 at first.

 Next (GBp 1709 ; 3.45% ; NXT ; NXT.L)
On Wednesday, Next Plc, the UK retailer, could deliver 1H pre-tax profit of appx. £180m vs £123.3m a year earlier on sales of £1.77bln vs £1.5bln. A week ago, the Co's price target was increased to 2034p from 1738p with a "buy" recommendation unchanged at Goldman Sachs. From a technical point of view, the stock still remains positively oriented, backed by its ascending 50D and 100D MAs. As long as 1585p holds on the downside, a further rebound is expected to 1775 and then to 1850 in the coming weeks.

 Oracle (USD 22.86 ; 6.03% ; ORCL ; ORCL.O)
The same day in the US, Oracle, the world business software giant, may post 1Q EPS of $0.3 compared with $0.28 a year ago. Sales could reach $5.25bln, almost unchanged YoY. Recently, the Co extended its strategic alliance with Capgemini to market and implement Oracle Enterprise Taxation Management software in the US. Technically, the stock rebounded last week but is close to a huge resistance area at $23.62-24.00. In which case, a short-term consolidation cannot be ruled out before any further upside.

 Fedex Corp (USD 77.32 ; 10.87% ; FDX ; FDX.N)
On Thursday, Fedex Corp is expected to unveil its 1Q results. Last week, the transport Co forecast 1Q/Aug EPS of $0.58 ($0.47 consensus) vs $1.23 a year ago and a Co guidance of $0.30-$0.45. Fedex forecast 2Q EPS of $0.65 to $0.95 vs $1.58 a year ago and a consensus of $0.70. Technically, the stock gapped up at the open Friday driven by this positive trading update. Above $70, the outlook remains bullish on the stock with a short-term target at $80.5 and a medium-term target at $89.5.

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

Corporate Calendar September 14th - September 18th

Economic Calendar (CET) September 14th - September 18th