Subprime worries weigh on US stocks

MARKET OUTLOOK

- US: US markets remain broadly flat, but volatile, week-on-week as many investors are still cautious about the effects of the subprime crisis on the economy. Shares from pharmaceutical, tech. hardware, food and staples retail outperformed while automobile, bank and energy lost ground last week. Technically, even if a short term bounce cannot be ruled out, a further decline is favoured.

- EUROPE: European markets were also badly oriented last week as investors anticipate a continued slump in the banking sector. Stocks from basic resources, industrial goods and services, oil and gas were under pressure while food and beverage, telecommunication and retail were among the best performers. Technically, a further decline should be seen.

COMPANY PREVIEW

ICAP (GBp 595.5 ; -4.72% ; IAP ; IAP.L)

On Tuesday, ICAP will announce H1 pre-tax profit of 146m UK pounds (104m UK pounds a year earlier). At the beginning of this month, the Co teamed up with Equinix to introduce a connectivity service for the financial market. A month ago, the Co agreed to acquire Traiana for $247m to improve processing of trades. In September, ICAP started trading in the Chinese market after receiving approval from the China Banking Regulatory Commission.

Target (USD 53.88 ; -4.11% ; TGT ; TGT.N)

In the US, Target is scheduled to post Q3 EPS of $0.62 ($0.59 last year) on sales of $14.82bn ($13.57bn) on the same day. In the middle of November, the Co reported its net retail sales for last month up 9.7% year-on-year to $4.45m from $4m. About two weeks ago, Target and the US's CPSC recalled 110,000 Chinese-made 'cars' movie-themed backpacks. At the beginning of October, the Co lost a four year legal battle to use its bull's-eye logo in the UK and potentially the rest of Europe.

Deere and Co (USD 145.06 ; -5.21% ; DE ; DE.N)

Wednesday, Deere and Co is expected to deliver Q4 EPS of $1.54 ($1.2 last year) on sales of $5.4bn ($5bn). Several days ago, the Co's shareholders approved a two for one stock split which will give investors an additional share for each one outstanding. In the same time, Deere benefited from rising commodity prices. Two months earlier, the Co gained a $125.7m contract to supply tractors to the US Marine Corps.

Patterson Cos (USD 37.93 ; 1.47% ; PDCO ; PDCO.O)

On the same day, Patterson Companies may present Q2 EPS of $0.4 ($0.35 a year ago), while sales are expected to rise to $758m compared with $694m last year. At the beginning of November, the Co announced the acquisition of Advanced Practice Systems, which would become part of Patterson's rehabilitation supply and equipment unit.

Air France-KLM (EUR 23.72 ; 5.19% ; AF ; AIRF.PA)

Finally, Air France-KLM Group may release Q2 net income of E422m (E374m a year earlier) on sales of E6.5bn (E6.1bn) on Thursday. A few days ago, the group reported that October passenger traffic fell 0.7%, instead of the 4.5% increase expected, which was due to a strike by cabin crew. Last month, Air France and Delta Air Lines signed a joint venture agreement to share revenues and costs on their transatlantic routes.