US equities close higher again

MARKET OUTLOOK

- US:US markets closed up for the third week in a row. This week's key economic data to be published will be Tuesday's October Advanced Retail sales and PPI and Wednesday's October CPI. Inflation risk remain the key driver for the pace of the Fed's rate hikes.

Alan Greenspan will speak today on the current account deficit. Technically, the current bounce remains in place. The S&P still has to retest its 52w high at 1245.8 while the Nasdaq 100 closed at a new 52w high on Friday. Key supports to maintain the upside bias stand at 1204 (S&P) and 1582 (Nasdaq 100).


- EUROPE: European markets were also bid up, thanks to a weaker euro. Corporate news have been generally better than expected and the banking and insurance sectors continued to outperform.

The ECB is preparing the market for an interest rate hike on concern about rising inflation (watch Wednesday's EU CPI data for October). Technically, the FTSE 100, Dax and Cac 40 remain above their 20 & 50D MAs. Expect a retest of the yearly highs before a pause can shape.


COMPANY PREVIEW

Home Depot (USD 41.91 ; 1.33% ; HD ; HD.N)

On Tuesday, Home Depot will report its 3Q EPS results. The market is looking for $0.68, compared to $0.60 in the same period last year on sales of $20.73bln ($18.77bln a year ago).


RWE (EUR 56.41 ; 0.23% ; RWE ; RWEG.DE)

Wednesday, RWE publishes its 3Q results. The utility is expected to show a 37% rise in net profit to around E350m. Higher interest rates could pressure utility companies in the future.


Sainsbury (GBp 292.75 ; 3.26% ; SBRY ; SBRY.L)

The same day, Sainsbury will announce its 1H results. On Friday Fitch affirmed its rating on the retail group at BBB with a negative outlook (unchanged). Year to date the stock is up 8.2%. Last week, the stock exited on the upside a consolidation channel in heavy volume.


Société Générale (EUR 100 ; 2.35% ; GLE ; SOGN.PA)

Thursday, Société Générale will report its 3Q results. The stock reached an all-time high of E100.2 last week. The bank is trading 10.8 times its estimated 2006 earnings compared to 10 times for BNP Paribas its closest rival.


Hewlett Packard (USD 28.52 ; -0.04% ; HPQ ; HPQ.N)

Finally on the same day, Hewlett-Packard will deliver its 4Q fiscal results. The market is looking for $0.46 up from $0.41 this time last year on revenue $22.75bln up from $21.4bln. HP's recent outshining of Dell was reinforced last week by the release of shipment figures for the last quarter which showed an 18.5% rise for HP versus 17.5% for Dell.