Yield curve inversion a major event

MARKET OUTLOOK

- US: Trading volume was thin across all markets last week with the major indices posting declines. For the full year the Dow Jones lost 0.61%, while the Nasdaq 100 added 1.48% and the broader S&P 500 added 3%.

The major event last week was the inversion of the yield curve which often precedes a slow down of the economy. Today US markets are closed, the busiest day for economic data will be Friday with December employment data. Technically, the US indices are set for a continuation of their short term consolidation.


- EUROPE: European markets failed to move significantly and activity was low. This week there are no major corporate earnings expected. Current weakness on Wall Street could spread in Europe therefore recent highs could be difficult to bypass early in the year.

The break of the 20D moving averages on the FTSE 100, CAC 40 and DAX would confirm a consolidation. On the economic front, watch Tuesday's unemployment data in Germany and France GDP data.


COMPANY PREVIEW


Walgreen (USD 44.26 ; -1.84% ; WAG ; WAG.N)

Walgreen reports 1Q earnings ending November 31 tomorrow. The market is looking for a profit of $0.33, up from $0.31 same time last year on revenue of 11.02bln. The company's November sales had climbed 7.8% compared to same month last year.


Monsanto (USD 77.53 ; -0.42% ; MON ; MON.N)

On Wednesday Monsanto announces 1Q results after having doubled its profit forecast for the quarter to $0.20 from $0.10 per share, which itself had come in at just one cent under consensus. The company recently raised its quarterly dividend payment by 18% to reach $0.20, payable on January 27.


Constellation Brands (USD 26.23 ; 2.38% ; STZ ; STZ.N)

On Thursday Constellation Brands publishes 3Q earnings. The market is looking for EPS of $0.50 compared to $0.43 in the same period last year. The stock has an important down gap to fill at $27.90.


Accenture (USD 28.87 ; 0.73% ; ACN ; ACN.N)

Another firm to post results on the same day is Accenture. The company is expected to report 1Q EPS of $0.34 up $0.03 from same time last year on sales of 4.1bln.


Wendy's International (USD 55.26 ; 0.07% ; WEN ; WEN.N)

And finally on Friday, Wendy's publishes its 4Q figures ending December 31. EPS of $2.14 is expected on revenue of $966m. The 3rd largest US fast food chain repurchased last Thursday 3.75m shares of its common stock for $207m, roughly $55.17 per share.