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US markets were volatile last week as the relief provided by the Fed's $200bln liquidity injection was overshadowed by Bear Stearns' bailout from the Fed and JPMorgan.
The Fed may announce Tuesday a 50bps rate cut to 2.5%, the lowest level since March 2005. This morning the Fed announced new measures to increase liquidity in the credit market including a 25bps cut in the discount rate to 3.25%. Stocks in the Health Care Equipment, Automobiles & Compo. and Diversified Financials sectors posted the biggest WoW declines. Shares in the Consumer Services and Materials sectors gained WoW. This week, expect indices to remain under pressure with downside risk intact.
European markets were also under pressure except in Spain where the Ibex 35 gained 2.6% WoW. Record oil prices and euro against the dollar continued to pressure shares in the Travel & Leisure and Technology sectors. On the upside, shares in the Food & Beverage benefited from upbeat comments from Nestle and their defensive aspect in a bear market. The risk is for further downside this week and European markets should follow the trend set on Wall Street.
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| MARKET ROUND UP |
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Weekly chg (%) |
Last |
| Dow Jones |
0.5 |
11951.1 |
| Nasdaq 100 |
0.4 |
1713.8 |
| Dax Xetra |
-1 |
6451.9 |
| Cac 40 |
-0.6 |
4592.2 |
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| FOREIGN EXCHANGE |
Euro/dollar : The daily RSI is overbought but do not show any reversal sign & the pair is supported by a ST rising trend line. LONG @ 1.55 with 1.652 in sight.
Dollar/yen : the pair has broken below the 101.65 strong support area (channel lower boundary & strong horizontal support). Down move towards 95.2 & 93.
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| COMPANY PREVIEW |
Generali (EUR 27.29 ; -1.48% ; G ; GASI.MI)
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On Tuesday, Generali may deliver FY07 net income of E3bln. At the beginning of last week, the Co announced to have completed the acquisition of Banca del Gottardo for appx. E1bln. A month earlier, the Co reported FY07 premiums up 2.7% to E65bln compared to E63bln a year ago. Furthermore, the Co has received approval to create a new liability unit by Chinese regulators.
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Goldman Sachs (USD 156.86 ; -2.01% ; GS ; GS.N)
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On the same day, Goldman Sachs is expected to post 1Q EPS of $2.59 compared to $6.67 a year earlier. The Sunday Telegraph reported the Co may announce $3bln in writedown. Friday the stock fell sharply on renewed concern about difficulties in US financial sector, highlighted by the Fed-JPMorgan bailout of Bear Stearns. Year to date GS is down 27% and heading towards a long term support area around $150-140.
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Nike (B) (USD 59.96 ; 2.95% ; NKE ; NKE.N)
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On Wednesday, Nike may unveil 3Q EPS of $0.79 ($0.68 a year ago) on sales of $4.3bln ($3.9bln). Last month, Nike announced to be the equipment supplier of the French Football Federation until the end of the 2017-2018 season. In the same period, the Co agreed to sell its Bauer Hockey unit for $200m to a group led by Kohlberg & Co. In January, the Co's £285m takeover offer was approved by Umbro's shareholders.
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Saint-Gobain (EUR 48.42 ; -2.5% ; SGO ; SGOB.PA)
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On Thursday, Sain-Gobain is expected to post FY07 net income of E2.1bln compared to E1.7bln a year ago on revenues of E43.4bln (E41.6bln). Earlier this month, the Co won European antitrust approval to acquire HeidelbergCement's Maxit unit for E2.13bln and completed the acquisition last week, which allowed the Co to double the size of its industrial mortars business.
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Fedex Corp (USD 84.8 ; -2.19% ; FDX ; FDX.N)
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Finally, FedEx Corp. may deliver 3Q EPS of $1.24 ($1.33 a year ago) on sales of $9.2bln ($8.6bln). In February, the Co's freight deliveries services were disturbed by tornadoes in the US. Fears of economic slowdown and high oil prices have been pressuring the stock. Below a declining trendline passing through $90, the risk is for a retest of the last 52w low at $80 reached on January 22, 2008 then $76.81, its lowest level since September 2005.
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Selection of those events which may affect the stock prices of international Large Caps |
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| CORPORATE CALENDAR March 17th - March 21st |
| Date |
Market |
Company |
Event |
| |
| Monday, March 17th |
| |
GE |
Linde |
annual results |
| |
GE |
Heidelbergcement |
annual results |
| |
IT |
Finmeccanica |
annual results |
| |
IT |
Banca Popolare Di Milano |
annual results |
| |
UK |
Wolseley |
1st-Half results |
| |
| Tuesday, March 18th |
| |
GE |
TUI |
annual results |
| |
GE |
IVG Immobilien |
annual results |
| |
IT |
Generali |
annual results |
| |
US |
Goldman Sachs |
1st-Quarter results |
| |
US |
Lehman Brothers Holdings |
1st-Quarter results |
| |
US |
GameStop Corp |
4th-Quarter results |
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| Wednesday, March 19th |
| |
US |
Morgan Stanley |
1st-Quarter results |
| |
US |
Nike (B) |
3rd-Quarter results |
| |
US |
General Mills |
3rd-Quarter results |
| |
US |
AES Corporation |
4th-Quarter results |
| |
US |
Discover Financial Services |
1st-Quarter results |
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US |
Cintas |
3rd-Quarter results |
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| Thursday, March 20th |
| |
FR |
Saint-Gobain |
annual results |
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FR |
Hermes |
annual results |
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GR |
OTE |
annual results |
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US |
Carnival |
1st-Quarter results |
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US |
Fedex Corp |
3rd-Quarter results |
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US |
KB Home |
1st-Quarter results |
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| Friday, March 21st |
| |
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No major expectations |
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| ECONOMIC CALENDAR (CET) March 17th - March 21st |
| Date |
Market |
Economic data |
Period |
Expected |
Last |
| |
| Monday, March 17th |
| 13:30:00 |
US |
Empire Manufacturing |
MAR |
-5.93 |
-11.72 |
| 14:15:00 |
US |
Industrial Production (MoM) |
FEB |
-0.1% |
0.1% |
| 14:15:00 |
US |
Industrial Capacity Utilization |
FEB |
81.3% |
81.5% |
| 18:00:00 |
US |
NAHB Housing Market |
MAR |
20 |
20 |
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| Tuesday, March 18th |
| 10:30:00 |
UK |
CPI - EU Harmonised (MoM) |
FEB |
0.7% |
-0.7% |
| 13:30:00 |
US |
Producer Price Index (MoM) |
FEB |
0.5% |
1% |
| 13:30:00 |
US |
PPI - Ex Food & Energy (MoM) |
FEB |
0.2% |
0.4% |
| 13:30:00 |
US |
Housing Starts (Thsd) |
FEB |
992 |
1012 |
| 13:30:00 |
US |
Bulding Permits (Thsd) |
FEB |
1021 |
1061 |
| 19:15:00 |
US |
Fed: Rates decision |
03/18/2008 |
2.5% |
3% |
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| Wednesday, March 19th |
| |
GE |
Import Prices (MoM) |
FEB |
NA |
0.8% |
| 11:00:00 |
EC |
Euro-Zone: Trade Balance (Bln) |
JAN |
NA |
-4249 |
| 11:00:00 |
EC |
Euro-Zone: Trade Balance (Bln) (MoM) |
JAN |
NA |
-4249 |
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| Thursday, March 20th |
| 10:30:00 |
UK |
M4 Money Supply (MoM) |
FEB |
NA |
1.4% |
| 10:30:00 |
UK |
Public Finances (PSNCR) (Bln) |
FEB |
2.44 |
-22118 |
| 10:30:00 |
UK |
Retail Sales (MoM) |
FEB |
-0.1% |
0.8% |
| 13:30:00 |
US |
Initial Jobless Claims (Thsd) |
W10 |
NA |
353 |
| 15:00:00 |
US |
Leading Indicators |
FEB |
-0.3% |
-0.1% |
| 15:00:00 |
US |
Philadelphia Fed. |
MAR |
-17.02 |
-24 |
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| Friday, March 21st |
| 08:45:00 |
FR |
Consumer Spending (MoM) |
FEB |
0.4% |
-1.2% |
| 08:45:00 |
FR |
Wages (QoQ) |
4Q |
NA |
0.3% |
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