Europe looking towards new year highs

MARKET OUTLOOK

- US: US markets had another positive week helped by reassuring economic data. Shares from semiconductors, energy and automobile led the advance week-on-week, while house and personal production, real estate and food and staples retailing lost ground. From a technical point of view, the uptrend should continue in the forthcoming days as the 20D MA remain in support.

- EUROPE: European markets ended the week up sharply, helped by mergers and acquisitions rumours. Stocks from basic resources, chemicals, automobiles and parts and industrial goods and services outperformed the market week-on-week, while media and health care had a limited positive gain. Technically, we are bullish and expect new year highs to be printed soon.

COMPANY PREVIEW

Carnival (GBp 2546 ; 0.87% ; CCL ; CCL.L)

Carnival will post 2Q net income of $405.7m ($380m last year) on revenue of $2.91bln ($2.66bln) on Tuesday. Last week, Citigroup announced the sale of 1.8m shares in Carnival for 45.4m UK pounds. Separately, Carnival Splendor, the largest 'Fun Ship' ever constructed, will start year-round seven day Mexican Riviera cruises in March 2009 and will therefore position the Co as a cruise industry leader in Southern California.

Best Buy (USD 47.77 ; -0.79% ; BBY ; BBY.N)

In the US, Best Buy is seen reporting 1Q earnings on the same day. 1Q EPS is seen at $0.50 ($0.50 last year) on sales of $7.83bln ($6.95bln). Last week, the Co hired Omnicom Group's BBDO New York for $200m annually to handle the Co's account planning, advertising strategy and execution, and media and consumer connection planning. Earlier in June, the group announced its plan to open smaller stores in Canada by next year which could almost double the number of its locations in the country.

Hennes and Mauritz (B) (SEK 428 ; 3.51% ; HMB ; HMb.ST)

On Wednesday, Hennes and Mauritz is scheduled to release 2Q net income of SK3.49bln (SK2.64bln last year) on revenue of SK20.21bln (SK17.06bln). At the beginning of May, the group considered introducing more new business concepts (Nyhetsbyraan Direkt). The expansion plans for the Co's regular stores will not be affected by the introduction of COS and H&M Home, while the expansion in China and Japan will be concentrated on a few large cities for the foreseeable future.

Morgan Stanley (USD 88.48 ; 1.58% ; MS ; MS.N)

Later, Morgan Stanley may publish 2Q EPS of $2 ($1.85 last year). Last week, the group agreed to invest around $60m in Bull Moose Energy to build power plants that will burn wood waste, tree trimmings and other biomass. In other news, Morgan Stanley sold 6.2m shares for 187.6m UK pounds in Anglo American. Separately, it will have to pay $4.4m to settle a class action lawsuit claiming that it had misguided investors to buy precious metals.

Fedex Corp (USD 111.37 ; 1.8% ; FDX ; FDX.N)

Finally, on Thursday, FedEx will announce 4Q EPS of $1.98 ($1.82 last year) on sales of $9.21bln ($8.49bln). A week ago, FedEx and Adobe Systems announced their collaboration to extend the research of FedEx's Print Online application for the users of Adobe Reader and Adobe Acrobat software. In May, the Co raised quarterly dividend to $0.10 cents a share, following its plan started in 2004.