Fed decision boosts US stocks

MARKET OUTLOOK

- US: US markets bounced this week as the Fed left its benchmark rate unchanged at 5.3%. The FOMC said: 'The economy seems likely to continue to expand at a moderate pace over coming quarters.' Stocks from telecom services, automobile, utilities and pharma and bio were among the best performers, while diversified financials, materials and real estate stocks closed on a negative note. From a technical point of view, the outlook remains uncertain, as Friday's close is showing a lack of momentum. The risk would remain to the downside.

- EUROPE: After a weak start, European markets ended in the green week-on-week. Shares from telecommunications, oil and gas, food and beverage and automobile led the advance while insurance, banks and basic resources lost ground week-on-week. Technically, the current rebound might last longer, but the outlook calls for caution as indicators are mixed.

COMPANY PREVIEW

Barry Callebaut (CHF 926 ; -7.31% ; BARN ; BARN.S)

Last Thursday, Barry Callebaut delivered 3Q results and sales rose 6% year-on-year to SF3.29bln. Asia sales increased 19.6% year-on-year to SF239.7m, European sales were up 5.9% year-on-year to SF2.29bln, while America's sales dropped 4.5% year-on-year to SF760.3m. The Co is now considering the sale of Barch's in the US. Separately, the Co hired banks for a sale of E350m of ten year bonds to replace part of a bank loan.

General Mills (USD 58.42 ; -0.07% ; GIS ; GIS.N)

In the US, General Mills announced 4Q earnings on the same day. 4Q EPS of $0.62 ($0.63 expected) from $0.64 a year ago, while sales increased to $3.1bln ($2.98bln) compared with $2.84bln in the same period last year. The Co sees FY08 EPS in range of $3.39-$3.43 and expects continued good sales growth. A week earlier, the Co raised its quarterly dividend to $0.39 from $0.37 per share.

Paychex (USD 39.12 ; -1.44% ; PAYX ; PAYX.O)

Still on Thursday, Paychex posted 4Q EPS of $0.36 (inline) from $0.32 a year ago on sales up 11% to $487.3m. FY07 net income rose 14% to $531.6m, revenue 13% to $1.9bln. For its FY08, the Co expects net income to rise 14% to 16% on revenue up 11% to 13% (less than the consensus). At the beginning of June, the group introduced its new tax credit services to help small and medium sized businesses identify and apply for wage-based tax credits.

Greene King (GBp 973.5 ; -2.94% ; GNK ; GNK.L)

This Tuesday, Greene King is expected to publish FY results. FY pre-tax profit seen at 244m UK pounds on revenue of 3.8bln UK pounds. In May, the Co was in advanced talks over the acquisition of Airbus SAS' plant in western England (Times). Last week, the Sunday Times announced that in case Greene King wins the bid, it will have to invest approx 135m UK pounds.

Alcoa (USD 40.53 ; 1.33% ; AA ; AA.N)

Finally, next Monday, Alcoa is seen reporting 2Q EPS of $0.84 ($0.89 last year). The group has recently hired Lehman Brothers to advise on the sale of its packaging unit. Last week, Alcoa Aluminio and Alcoa Foundation and Conservation International launched a programme to support conservation of the biodiversity in the west of Para State and the east of Amazonas State, in Brazil.