US equities start 2006 strongly

MARKET OUTLOOK

- US: US markets rose moderately after a strong start for the year. December core PPI rose just 0.1%, easing concern about inflation risk. The nuclear situation in Iran pressured investors and oil prices traded on the upside.

The 4Q earnings season is kicking off this week. On the economic front, watch Wednesday's December CPI data. US indices are expected to move accordingly.

- EUROPE: European markets declined last week on profit taking. Telecom shares under pressure after France Telecom cut its 2005 growth sales forecast. Watch the inflation data for Germany due out today.

Technically, European indices are set to continue their pause but the rising 20D & 50D MAs should maintain the upside bias in the medium term. Supports to look at stand at 4800 & 4780 on the Cac 40, 5450 & 5400 on the Dax and 4680 & 4710 on the FTSE 100.

COMPANY PREVIEW

Yahoo (USD 39.9 ; -7.66% ; YHOO ; YHOO.O)

On Tuesday Yahoo! reports 4Q data. EPS expected at $0.17, a 32% increase over last year, while revenue is expected to rise 36% to $1.07bln. The company's stock was recently cut to 'neutral' from 'buy' by Merrill Lynch.

Endesa (EUR 22.18 ; 1.28% ; ELE ; ELE.MC)

Endesa, target of a E21.8bln hostile bid from Gas Natural, reports its results on Wednesday. The power company may announce a special dividend.

Apple Computer (USD 85.5899 ; 12.18% ; AAPL ; AAPL.O)

Later in the day, Apple Computer releases 1Q results. The company's CEO had already announced record sales for the quarter of $5.7bln, a 63% jump YoY. Consensus EPS has subsequently shot up to $0.55 from $0.35 a year ago. The stock is up 19 year to date and may rise further according to a report in Barron's.

JP Morgan Chase (USD 39.92 ; -0.25% ; JPM ; JPM.N)

On the same day JPMorgan releases its 4Q earnings. Investment banking activity is expected to again be the main force behind this quarter's results, with EPS seen at $0.72, offsetting shrinking net interest margins and higher credit losses.

Citigroup (USD 48.92 ; 0.62% ; C ; C.N)

And finally on Friday Citigroup publishes its 4Q data. Once again, Investment banking is seen as key element to the bank's results. The market is looking for a profit of $1.00.