Fed rate cut speculation boosts stocks

MARKET OUTLOOK

- US: US markets rebounded last week helped by market speculation that the expected interest rate cut from the Fed on Tuesday, and good consumer spending, will help the US economy weather the current housing crisis. US brokers are expected to start reporting their quarterly results this week. Stocks from diversified financials, consumer services and automobiles and compo sectors gained most, while shares in the semi-conductors, commercial and media were under pressure. Volatility and cautiousness should remain high this week.

- EUROPE: European markets were also up despite Friday's report that the UK's Northern Rock sought emergency lending from the Bank of England, raising fears the credit crisis is hurting financial institutions. The best performers were found in the personal and household goods, utilities and telecommunications last week, while laggards were in the construction and materials, travel and leisure and financial services sectors. European indexes are expected to follow Wall Street's mood this week.

COMPANY PREVIEW

Resolution Plc (GBp 637 ; 1.76% ; RSL ; RSL.L)

On Tuesday, Resolution could post operating profit of approx. 127m UK pounds. Last year, H1 pre-tax profit reached 88.9m UK pounds. Last week, the Co agreed to lower the number of shareholders who have to approve the acquisition of Friends Provident. Separately Resolution will generate an extra 100m UK pounds from integration of its purchase of Banco Santander's UK life operations.

Lehman Brothers Holdings (USD 59.5 ; 12.37% ; LEH ; LEH.N)

In the US, Lehman Brothers is scheduled to announce Q3 earnings on the same day. Q3 EPS seen at $1.49 ($1.57 last year). On September 6, the Co announced that it would close its Korean mortgage unit and cut 850 more jobs due to the reduction in size of its mortgage operations in the US and overseas. The market will look for comments on the impact of the current debt crisis on the Co's business.

Danisco (DKK 385 ; -0.52% ; DCO ; DCO.CO)

Danisco may present Q1 net income of DK300.1m (DK414m a year earlier) on revenues of DK4.81bn (DK5.28bn) on Wednesday. The Co said last week that it expects to exceed a European Union sugar quota of 929,000 metric tonnes in the current fiscal year. Earlier, the board of Danisco rejected a shareholder request to split up the Co to boost returns.

Oracle (USD 20.07 ; -0.45% ; ORCL ; ORCL.O)

Thursday, Oracle should publish Q1 EPS of $0.21 ($0.17 a year ago) on sales of $4.33bn ($3.59bn). At the beginning of the month, Oracle acquired Bridgestream to provide the most comprehensive and feature-rich identity management solution. A week earlier the Co also bought Netsure Telecom for an undisclosed price.

Computer Sciences (USD 54.05 ; -2.33% ; CSC ; CSC.N)

Finally, on Friday, Computer Sciences is seen reporting Q1 EPS of $0.71 ($0.61 last year) on sales of $3.76bn ($3.55bn). A week ago, Computer Sciences signed a three year IT services contract with Woodside worth $25m. In other news the Co was awarded a contract from the US Air Force valued $820m. Separately, the Co said that accounting errors over the past 10 years will force it report an additional $200m in tax expenses.