Market Outlook November 2nd - November 6th

Market Outlook

- US : US indices tumbled last week on concern economic growth will disappoint in the quarters to come despite a better than expected 3Q GDP growth of 3.5% vs 3.2% expected. Shares in the Banks (-7.23%), Diversified Financials (-7.53%) and Automobiles (-10.58%) sectors led the decline. The House. & Personal Prod. (+0.06%) sectors was the only sector to be flat WoW. Technically on the S&P 500 the break of 1060 has triggered a down move that should lead the benchmark to 1000/990.

- EUROPE : In Europe, the main indices fell WoW except the OMX which traded up 1.3%. Shares in the Basic Resources (-7.65%), Insurance (-8.24%) and Automobiles & Parts (-8.73%) sectors were hit by heavy profit taking. More defensive shares in the Food & Beverage (+1.15%), Health Care (+0.71%) and Retail (+0.53%) sectors managed to post WoW gains. From a technical point of view, the STOXX 600 index has entered a consolidation phase by breaking down 238 and its 20d moving average. The next down targets stand at 229 and 222.

 November 2nd - November 6th

 Market Round up

 Foreign Exchange

Euro/dollar : The pair has struck against its bullish channel upper boundary but remains on the upside. LONG above 1.4450 towards 1.5250 & 1.58.

Dollar/yen : The pair has rebounded on its support and should be capped by its next resistance. SHORT @ 93 with 87 or even 84.20 in sight.

Company preview

 BMW (EUR 33.28 ; -6.53% ; BMW ; BMWG.DE)
Tuesday, BMW, the European luxury cars manufacturer, is expected to release double digit net income for its 3Q vs E296m a year ago on sales of E10.3bln vs E12.6bln. Last week, the Co formed a joint venture with SGL Carbon to produce carbon-fiber parts. Earlier, the Co said September vehicle deliveries rose 0.7% YoY to 122,354 cars and SUVs. Technically, the stock broke down its 20D MA last week. The risk is now a slide to E30 and E29.

 UBS (CHF 17.17 ; -4.51% ; UBSN ; UBSN.VX)
On the same day in Europe, UBS may post a 3Q net loss vs a profit of SF296m a year ago. Recently, the Co named former Merrill Lynch executive Robert McCann as CEO of Wealth Management Americas, replacing Marten Hoekstra. Technically, the bias remains bearish for the stock since it escaped on the downside from a former key support around SF18. A further pullback is therefore expected towards SF16 and SF14 in the coming weeks.

 Total (EUR 40.82 ; -2.48% ; FP ; TOTF.PA)
On Wednesday, Total is expected to post 3Q net income of appx. E1.8bln compared to around E3bln a year earlier. A week ago, the Co discovered oil in bloc 17/06 offshore Angola. The Co's price target was raised to E43 from E41 with a "neutral" rating unchanged at UBS. From a technical view, the stock remains under pressure below the E42.5 resistance and has started to reverse down. Hence, a further down move is more likely towards E39 & E38 in the forthcoming days.

 Cisco Systems (USD 22.81 ; -5.63% ; CSCO ; CSCO.O)
The same day in the US, Cisco Systems could deliver 1Q EPS of $0.3 compared to $0.37 last year on sales of $8.7bln vs $10.3bln. A few days ago, the Co said it may consider dropping its NOK17.2bln offer for Tandberg. In addition, the Co said planned to buy ScanSafe, a software-as-a-service Web security solutions company for around $183m. Graphically, the stock reversed down last week and may test its nearest support at $22, if broken, further decline should occur with targets at $20.5 and $20.0.

 Deutsche Telekom (EUR 9.305 ; -2% ; DTE ; DTEGn.DE)
Thursday, Deutsche Telekom is expected to report 3Q net income of appx. E850m compared to E521m a year ago on revenue of E16.3bln, almost in line YoY. Earlier, Boersen-Zeitung reported the Co's T-Systems corporate-clients unit could win an outsourcing order from Philips Electronics. From a technical view, the stock has just broken down its MT rising trend line. A bearish acceleration will probably occur in sight to E9 and E8.75 in extension.

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

Corporate Calendar November 2nd - November 6th

Economic Calendar (CET) November 2nd - November 6th