US markets shed 2006 gains

MARKET OUTLOOK

- US: US markets closed lower week on week as the earnings season had a weak start, oil prices passed the $68 mark and investors took their profit ahead of the FOMC meeting on January 31. General Electric and Intel were among the heavy weights that reported disappointing results. The Nasdaq 100, Dow Jones and S&P 500 are set to continue their consolidation this week.


- EUROPE: European markets followed Wall Street, once again, although corporate activity was less intense and did not provide any major market moving news. On the economic front, watch tomorrow's German IFO - Business Climate survey. The ECB is more and more preparing the market for a rate hike during the first quarter of the year. Intermediate supports have been broken on the Cac 40, Dax and FTSE 100 therefore calling for a continuation of the consolidation in the short term.


COMPANY PREVIEW


Bank of America (USD 44.19 ; -3.52% ; BAC ; BAC.N)

On Monday Bank Of America reports 4Q results. The market is looking for a profit per share of $1.02. Growth in fee income is expected to stem from a 17% increase in service charges, a 15% increase in card revenue, and a 9% improvement in investment and brokerage services YoY.


Johnson and Johnson (USD 60.8 ; -2.27% ; JNJ ; JNJ.N)

Tuesday Johnson & Johnson is scheduled to publish its 4Q data. Estimated EPS at 0.72, on revenue of $13.18bln. Investors will want to know whether the company will yet again raise its bid for Guidant or pursue other alternatives.


Nokia (EUR 15.08 ; -3.02% ; NOK1V ; NOK1V.HE)

Nokia reports its 4Q results on Thursday. The world's largest mobile-phone maker will be under pressure to perform better than rival Motorola which published disappointing results last week. EPS expected at E0.24 on revenue of E9.97bln. The stock was recently cut to "hold" from "buy" by Deutsche Bank.


Siemens (EUR 70 ; -3.01% ; SIE ; SIEGn.DE)

Siemens publishes its results the same day. The company's CEO announced plans for acquisitions in the energy, healthcare, mobility, water and security technology fields in order to boost sales after recent divestitures.


Microsoft (USD 26.41 ; -2.69% ; MSFT ; MSFT.O)

And finally on the same day Microsoft releases its 2Q earnings. The market is expecting a profit per share of $0.33 inline with the company's previous forecast for the quarter. Xbox supply constraints could however have put pressure on festive period revenue.