Market Outlook September 20th - September 24th

Market Outlook

- WALL STREET:
US Indices gained ground last week with most of the advance done on Monday after Basel Committee on Banking Supervision announced an agreement regarding Basel III rules during the week end. New rules were seen as not being a too strong pressure for US banks. However, this announcement failed to sustain the sectors the days after as banks & diversified financial ended the week slightly up after their Monday rally. As regard to economic releases, the week started with an August US. Budget deficit narrowing to -$90.5bln (-$95bln expected) vs. -$103.6bln in July. Tuesday, August Advance retail Sales rose 0.4% (0.3% expected) vs. 0.3% in July (revised lower from +0.4%) while Retail Sales less Autos jumped 0.6% (0.3% expected) vs. +0.1% in July (revised lower from +0.2%). Retail stocks advanced 3% during the week. Wednesday September Empire Manufacturing declined to 4.14 (8.00 expected) from 7.10 in August. August Industrial Production rose 0.2% (in line with the consensus) but was revised lower for July to +0.6% from +1%. Weekly jobless claims declined to 450k (459k expected) vs. 453k the previous week (revised higher from 451k). September Philadelphia Fed Index rose to -0.7 (+0.5 expected) from -7.7 on August. Finally, Friday, September University of Michigan Confidence dropped to 66.6 (70 expected) vs. 68.9 in July. Regarding sectors, Semiconductors, Automobiles, Technology Hardware advanced more than 4.5% whereas Media, Food & Beverage, Transportation, Energy, Utilities ended the week in the negative territory. Technically, the S&P 500 remains pressured by its trading range resistance at 1130.

- EUROPE:

Company preview

Adobe Systems (USD 32.78 ; 1.8% ; ADBE ; ADBE.O)
On Tuesday, Adobe Systems is expected to publish 3Q EPS of around $0.5 compared to $0.28 a year earlier on sales of $985m vs $698m. Recently, the Co launched its Adobe Flash Media Server 4 software, the industry solution for streaming video and real-time communication. Earlier, the stock was downgraded to "equal weight" from "overweight" at Morgan Stanley. Technically, the price surged last week following a breakout of the neckline of its "double-bottom" pattern. A test of $34 should be in sight before any further upsides towards $36.

General Mills (USD 36.17 ; -2.74% ; GIS ; GIS.N)
The same day, General Mills may release 1Q EPS of $0.63 compared with $0.64 a year ago on sales of around $3.6bln vs $3.5bln. Early this month, the Co reaffirmed its FY guidance of $2.46-$2.48 per share (the consensus of $2.48 per share). In addition, the Co doesn't expect an increase from last year in 1Q net income. From a technical point of view, the stock is well positively oriented above its rising 20D MA. Above $35.5, look for a new bounce to $38 and $39 in extension.

 Inditex (EUR 57.61 ; 1.77% ; ITX ; ITX.MC)
Wednesday, Inditex could announce 1H net income of E563m compared to E375m a year earlier on revenues of E5.5bln vs E4.86bln. Earlier, the world's largest clothing retailer launched online sales of its fashion label, Zara in some of European countries. The Co's price target was raised to E65 from E60 at Citigroup. From a chartist point of view, the shares achieved a year-to-date new high after the penetration of its former resistance at E54, which will probably open the way to E60 and event to E65 as possible.

 Bed Bath & Beyond (USD 41.1 ; 1.86% ; BBBY ; BBBY.O)
On the same day, Bed Bath & Beyond is expected to report its 2Q results. The US retailer may publish 2Q EPS of $0.63 compared with $0.52 last year with sales of $2.1bln vs $1.9bln. From a technical view, the stock is currently consolidating above its support at $40. As long as the 20D MA still holds on the downside, a further rebound is more likely towards $45 in the forthcoming days.

 Nike (USD 77.26 ; 4.76% ; NKE ; NKE.N)
On Thursday, Nike could deliver 1Q EPS of nearly $1, almost in line with last year on sales of $5.2bln vs $4.8bln. Two weeks ago, the Co launched its new Nike+ GPS App on the App Store. Recently, the Co's price target was raised to $95 ("outperform" rating unchanged) from $85 at Credit Suisse. Graphically, the stock broke above the key level at $75 last week and should challenge its $78.5 resistance before any further bounces towards $80.

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

Corporate Calendar September 20th - September 24th

Economic Calendar (CET) September 20th - September 24th