US markets to stay flat

MARKET OUTLOOK

- US: Last week US markets marked a pause on concern about the effects of Katrina on the US economy and ahead of this week's FOMC meeting. The market expects a 25bps rate hike to 3.75%, the sixth increase this year. The main question is when the Fed will end its tightening cycle. Technically, the SP500 and Nasdaq 100 look set for a flat consolidation in the short term. In the medium term, above respectively 1200 and 1550 the uptrend remains intact.

- EUROPE: European markets continue to trend inline with Wall Street. The ZEW German survey will be a key economic data to watch on Tuesday. Last month, investor confidence in Germany jumped to its highest level in 17 months after the euro's decline. French consumer spending for August will attract attention on Thursday (seen up 0.2% MoM). Technically, European indices call for a ST pause but remain well oriented in the MT.

COMPANY PREVIEW

AGF (EUR 74.75 ; 5.51% ; AGF ; AGFP.PA)

AGF will announce on Tuesday its 1H results. The stock is up 35.7% so far this year and accelerated recently on speculation its parent company Allianz will buyout minority holders in the near future following Allianz 'acquisition of Italian based RAS.

Cairn Energy (GBp 1852 ; 3.81% ; CNE ; CNE.L)

Cairn Energy reports on Tuesday its 1H results. Last week UBS raised its target on the oil company to 2240p from 2120p. The stock is up 70% year to date, trading near its record high, thanks to higher oil prices.

Goldman Sachs (USD 115 ; -0.14% ; GS ; GS.N)

Goldman Sachs reports on Tuesday its 3Q EPS before market. Lehman Brothers and Bear Stearns reported last week better than expected results. The markets expects EPS to reach $2.29 from $1.74 in the same period last year, driven by strong trading and underwriting revenues.

Fedex Corp (USD 80.32 ; 0.03% ; FDX ; FDX.N)

Fedex Corp announces on Wednesday its fiscal 1Q/Aug EPS before market. The market is looking for a 8.33% rise in EPS to $1.17 on revenue up 9% to $7.6bln. Last week FedEx agreed to buy six Airbus A300-600 cargo aircraft for delivery starting in 2007.

Wendel Investissement (EUR 84.15 ; 5.58% ; MF ; MWDP.PA)

Wendel Investissement reports on Thursday its 1H results. In July the holding company reported sales up 10.6% to E1.448bln. All units contributed to revenue growth. Last week it said it cut its Valeo stake by 23.5%, below the 5% threshold (4.08%).