European markets endure mixed week

MARKET OUTLOOK

- US: US markets closed up week-on-week driven by better than expected corporate earnings and a weak dollar. Shares from automobiles, cons. durables, energy, semiconductors and tech. hardware led the advance, gaining more than 3%, while only stocks from transportation really lost ground last week. Technically, notwithstanding an intermediary correction, the bias should remain positive as indicators are bullish and well oriented.

- EUROPE: European markets were mixed week-on-week with the Cac, the Dax, the Eurostoxx 50 and the S&P/MIB reaching new highs for the year while the FTSE, the AEX and, moreover, the Ibex losing ground. Stocks from automobiles, industrial goods and services and retail ended on a positive note while all other sectors ended in the red, led by shares from basic resources, media and financial services. Technically, a rebound should be expected this coming week as all indexes are close to strong support areas.

COMPANY PREVIEW

Procter and Gamble (USD 62.98 ; -1.29% ; PG ; PG.N)

On Tuesday Procter and Gamble is scheduled to release 3Q EPS of $0.74 ($0.63 a year ago) on revenue of $18.56bln ($17.25bln). On April 16, the Co declared that it raised its quarterly dividend by 13% to $0.35 as it increased cash flow last year. In other news, the Co's merger with Gillette has turned out to be more complicated than anticipated (WSJ on 24/04/07).

Time Warner (USD 20.61 ; -0.53% ; TWX ; TWX.N)

Time Warner is seen reporting 1Q results on Wednesday. Market sees EPS of $0.21 ($0.26 last year) on revenue of $11.15bln ($10.45bln). The Co may consider reducing its 84% stake in its cable unit at a meeting in May. In other news, Time Warner and Hoyts initiated talks with DLF Group, Raheja Group and Sobha Developers to set up movie-theatre chains in India (Economic Times on 18/04/07).

Starbucks (USD 31.5 ; -0.51% ; SBUX ; SBUX.O)

Starbucks will publish its 2Q earnings on Thursday. EPS is seen at $0.19 ($0.16 last year) on sales of $2.29bln ($1.88bln ). The Co plans to add 10,000 coffee shops in the next 4Y. In March, Starbucks and AmRest Holdings signed a preliminary agreement to bring the American coffee shops to the Czech Republic, Hungary and Poland (Mlada Fronta Dnes). Starbucks is now in talks with partners in India about setting up stores there.

UBS (CHF 78.65 ; 0.51% ; UBSN ; UBSN.VX)

Still on Thursday, UBS is expected to announce 1Q net income of SF3.76bln (S3.5bln last year). UBS has recently increased its stake in Hypo Real Estate Holding to 3.1%. Moreover it started trading UK natural gas as it expands its European commodity business. In other news, UBS launched an index to give investors access to returns from rising investments in weather derivatives.

Total (EUR 54.2 ; 0.61% ; FP ; TOTF.PA)

Finally, on Friday, Total may post 1Q net income of E2.96bln (E3.68bln last year) on sales of E30.97bln (E39.6bln). Last week the Co announced that it will give the size and location of a proposed oil-processing plant in Canada by the middle of May, as it seeks to expand production from Alberta's oil sands. A week earlier, Total won 32 exploration blocks off Alaska, as oil companies turn north for new reserve sources. In addition, OAO Gazprom held talks with Total about joining the Russian Co's $20bln Shtokman gas project.