US stocks hit three month low

MARKET OUTLOOK

- US: US markets dropped to a three month low capping the biggest weekly drop since January 2003. US markets tumbled after sharp losses in China and on concern that profit growth would be wiped out by a recession. All sectors closed down week-on-week led by semiconductors, financials and transportation. Defensive stocks like utilities and telecom services managed to limit the drop. Technically, the downside risk still prevails as technical indicators are clearly bearish and do not show any reversal sign.

- EUROPE: European markets were also under pressure with all DJ Stoxx sectors declining. Stocks from the basic resources, construction and materials and financial services were among the worst performers, while retail stocks limited the correction. Technically, all major European indexes broke out of their mid-term ascending channel. Consequently, the outlook is strongly negative in the forthcoming days.

COMPANY PREVIEW

Xstrata (GBp 2363 ; -10.66% ; XTA ; XTA.L)

Xstrata publishes its full year and 4Q results on Tuesday. A year ago, the Co reported FY net income of $1.706bln, operating profit reached $2.509bln and sales $8.05bln. Last week, Xstrata, Lonmin and BHP Billiton led a decline in mining shares on speculation measures to control China's booming economy will cut demand for copper and other metals.

Credit Agricole (EUR 29.74 ; -5.83% ; ACA ; CAGR.PA)

On Wednesday, Credit Agricole delivers its full year results. The market sees net income adjusted up to E4.835bln from E3.89bln last year. On February 28, Credit Agricole secured European Union antitrust approval to purchase 663 bank branches in Italy. In other news, Intesa Sanpaolo completed the sale of its Cassa di Risparmio di Parma e Piacenza and Banca Popolare FriulAdria units to Credit Agricole on March 1.

Fortis (EUR 31.47 ; -8.17% ; FORA ; FOR.AS)

Thursday, Fortis will report its 4Q and FY results. Last year, FY net income reached E3.94bln, pre-tax income E5.149bln and total revenue E90.42bln. On March 1, the group agreed to buy a controlling stake in the Hong Kong insurance unit of Pacific Century Regional Developments for approx. $448m. Fortis will offer HK$8.18 a share for a 50.5% stake.

Costco Wholesale (USD 55.75 ; -2.99% ; COST ; COST.O)

The same day before market, Costco Wholesale is scheduled to announce quarterly results. 2Q/Feb EPS is expected to reach $0.66 ($0.62 a year ago) on a revenue of $15.42bln ($14.05bln). On February 26, the group tightened its return policy for consumer electronics after clients bringing back equipment hurt profit.

EADS (EUR 23.63 ; -8.62% ; EAD ; EAD.PA)

Finally, EADS is expected to deliver on Friday its FY results. The group a year ago posted FY net income of E1.676bln and sales of E34.21bln. On March 2, United Parcel Service said it will cancel its $2.8bln order for 10 of the superjumbo A380 jets.