Bearish outlook for US, European markets

MARKET OUTLOOK

- US: US markets were bearish week-on-week as the Nasdaq 100 had a limited decline while the Dow Jones and the S&P500 lost ground due to concern about economic growth and the housing market. Moreover, inflation cut the odds of a Fed interest rate reduction. Stocks from utilities, telecom services and capital goods managed to close on a positive note while the automobiles, retailing and insurance sectors were among the worst performers. Technically, the downside risk still prevails and a further decline should be seen in forthcoming days.

- EUROPE: European markets were also under pressure. Stocks from banks, insurance and financial services had a huge drop week-on-week while retail, chemical food and beverage and also personal household goods shares had a limited positive gain. Technically a new bearish week is expected on all major European indexes.

COMPANY PREVIEW

Oracle (USD 16.7 ; 0.42% ; ORCL ; ORCL.O)

Oracle publishes its 3Q/Feb results on Tuesday after market. The group is expected to report EPS of $0.22 ($0.19 a year ago) on a revenue of $4.31bln ($3.47bln). The market sees solid organic growth, due to the Siebel Systems acquisitions, and will review the company's software licence revenue and consulting revenue. Oracle's enterprise application business will also be evaluated.

Metro (EUR 55.42 ; 3.24% ; MEO ; MEOG.DE)

Tuesday, Metro delivers its FY results. Last year, the Co reported FY net income of E531m, operating profit of E1.74bln and sales of E55.72bln. The group has already reported FY sales up 7.5% YoY to E59.9bln. The market sees FY operating profit increasing faster than sales, up 10.9% YoY to E1.93bln.

Morgan Stanley (USD 74.41 ; -2.09% ; MS ; MS.N)

The same day, Morgan Stanley will report its 1Q/Feb results. EPS is expected to reach $1.87 ($1.50 a year ago). Last week, Lehman Brothers reported 1Q/Feb EPS of $1.96 ($1.95 expected) from $1.75 a year ago. 1Q capital markets fixed income revenue reached $2.16bln from $2.1bln last year, equities revenue $1.338bln versus $944m last year, investment banking revenue $850m from $835m and investment management revenue $695m from $580m a year ago.

Nike (B) (USD 107.47 ; 1.53% ; NKE ; NKE.N)

On Thursday, Nike is scheduled to announce quarterly results. 3Q EPS is seen at $1.32 ($1.24 a year ago) on a revenue of $3.93bln ($3.61bln). On March 7, Adidas reported 4Q profit that missed analysts' estimates due to poor demand for Reebok sneakers and clothing. Last Friday, Nike's target price was raised to $128 from $120 by UBS.

Intesa Sanpaolo (EUR 5.32 ; -2.31% ; ISP ; ISP.MI)

Finally, Intesa Sanpaolo is expected to deliver on Friday its FY results. The market expects FY net income adjusted to reach E3.56bln and sales E14.31bln. On March 15, daily Il Messaggero reported that Intesa Sanpaolo and Mediobanca are looking for partners to bid for Olimpia, the group owning 18% of Telecom Italia.