Bearish indicators in US and Europe

MARKET OUTLOOK

- US: After a corrective move on Thursday, US markets bounced at the end of the week helped by better than expected PPI numbers and despite lower than expected retail sales data. Shares from insurance, telecom services, capital goods and tech. hardware led the advance week-on-week while stocks from real estate, cons. durables and food and retailing lost ground. Technically, the daily indicators now show some weakness signs. Thus, even if a limited rise cannot be ruled out in the early part of the week, we are now cautious for the forthcoming days.

- EUROPE: European markets had a flat week, as some bearish pressure was contained by M&A rumours among banks. Stocks from the basic resources, construction and materials, media had a sharp rise week-on-week while shares from telecommunications and chemicals were among the worst performers. Technically, on major European indices, we will wait for new year highs to re-instate a clear MT bullish view.

COMPANY PREVIEW

Daimlerchrysler (EUR 64.02 ; 6.29% ; DCX ; DCXGn.DE)

On Tuesday, Daimler Chrysler is seen reporting 1Q net income of E897m (E299m last year) on revenue of E31.23bln (E37.18bln). In April the Co's North America unit declared that it planned to cut sales this year to boost profits. Later, in May, the group announced about a $67m investment programme in India.

Wal-Mart (USD 47.78 ; -1.02% ; WMT ; WMT.N)

In the US, Wal-Mart is expected to publish 1Q EPS of $0.68 ($0.55 last year) on sales of $86.8bln ($70.9bln) on the same day. The Co said March sales rose 4%, while April sales fell 3.5 year-on-year. In March, the Co was considering a bid for J Sainsbury (Independent).

Home Depot (USD 38.86 ; -0.1% ; HD ; HD.N)

Still on Tuesday, Home Depot is to post 1Q EPS of $0.59 ($0.60 last year). In March, 3 teams of private equity firms formed to consider bids for the Co's wholesale supply business, which could fetch about $11bln in a sale seen as crucial to the Co's refocusing on its core retail business.

Telefonica (EUR 16.7 ; -0.24% ; TEF ; TEF.MC)

Wednesday, Telefonica may deliver 1Q net income of E1.29bln (E1.27bln last year) on revenue of E13.4bln (E12bln). The Co recently said it could sell its 5.8% stake in PT Multimedia SGPS (La Gaceta de los Negocios). In other news, Telefonica may be forced to buy out minority shareholders in Telecom Italia's mobile-phone unit in Brazil to comply with the country's law (Valor Economico).

Hewlett Packard (USD 45.24 ; 3.31% ; HPQ ; HPQ.N)

Finally, on the same day, Hewlett-Packard will announce 2Q EPS of $0.67 ($0.69 last year) on revenue of $25bln ($22.55bln). Last week the Co raised its 2Q EPS ex-item guidance to $0.69-$0.70 ($0.65 consensus) from $0.63-$0.64 and sales guidance to $25.5bln-$25.55bln ($24.56bln consensus) from $24.5bln. In April, Hewlett Packard agreed to buy closely held Arteis to add a graphic-design service for small business customers.