Talk of rate cuts lifts stocks

MARKET OUTLOOK

- US: US markets enjoyed the best weekly gain since March, after Federal Reserve Chairman Ben S. Bernanke signalled he may cut interest rates and the Treasury moved closer to a plan to prevent thousands of Americans from losing their homes. All shares moved up this week, especially stocks from banks, automobiles and components, diversified financials, materials and insurance. From a technical point of view, last week's recovery should be over now. A downtrend resumption is favoured and a new test of the recent lows is expected.

- EUROPE: European markets recovered last week due to speculation regarding a possible interest rate cut in the US. All sectors were up this week, especially basic resources, banks, automobiles and parts and industrial goods and services. Technically, major indexes are now close to strong horizontal resistance areas (mid-November acceleration level). The downside risk should prevail this week and a new corrective move should be seen.

COMPANY PREVIEW

Thyssenkrupp (EUR 40.3 ; 8.13% ; TKA ; TKAG.DE)

In Europe, ThyssenKrupp is expected to unveil FY net income of E2bn (E1.6bn last year) on revenues of E51.4bn (E47.1bn) on Tuesday. Two weeks earlier, the Co bought Apollo Metals from Murray International as it wishes to expand into aviation materials market. About a month ago, Germany's steelmaker, won a contract to build an ammonia plant in Saudi Arabia. Moreover, the Co planned to build a $25m plant in Kazakhstan.

Autozone (USD 111.63 ; 4.09% ; AZO ; AZO.N)

On the same day, AutoZone will post Q1 EPS of $1.9 compared with $1.73 a year earlier. Sales are expected to be around $1.4bn compared with $1.3bn last year. In the middle of September, AutoZone's profit surged as it managed to achieve strong sales figures of its profitable private-label products. Several days before, AutoZone sold auto and light truck parts through its 3,933 stores in the US and 123 stores in Mexico.

Bouygues (EUR 61.22 ; 3.99% ; EN ; BOUY.PA)

Wednesday, Bouygues is seen reporting Q3 net income of E411m (E358m a year ago) on revenues of E1.2bn. At the end of November, the Co received an E500m construction order for two UK tunnels. In other news, Bouygues Telecom planned to launch speedier 3G wireless services in France. In October, the Co raised its stake in Alstom to 30.07% from 25.35% previously.

Covidien (USD 40.11 ; 4.59% ; COV ; COV.N)

In the US, Covidien will deliver Q4 EPS of $0.6 on sales of appx. $2.59bn on Thursday. Last month, the Co announced that one of its units reached an agreement to supply X-ray contrast imaging agents to MedAssets Supply Chain Systems. In the same period, another unit of the Co acquired Scandius Biomedical. At the end of October, Covidien notified its customers of a price-rising plan in retail products business.

National Semiconductor (USD 22.86 ; 2.24% ; NSM ; NSM.N)

Finally, National Semiconductor may release Q2 EPS of $0.3 compared with $0.27 last year, while sales may decrease to $498m vs $501.6m a year ago. In November, the Co signed an agreement to evaluate New Momentum's Brand Protection software. At the end of October, National Semiconductor added two new light-emitting diode drivers to its PowerWise energy-efficient product family.