Hopes for an end to rate increases

MARKET OUTLOOK

- US : US markets bounced last week driven by better than expected corporate earnings and anticipation of an end to the rate hike cycle by the Fed as the US economy slowed more than expected during the 4Q (1.1% growth vs 2.8% expected). The Fed is meeting on January 31 and the market is looking for a 25bp increase to 4.5%. After a pause, US indices could retest their year high.

- EUROPE : European markets moved inline with Wall Street. Friday's hostile takeover bid on Arcelor from Mittal Steel gave a boost to the market. All eyes turned to the steel sector and stocks that could be targets of a takeover offer (Danone...). The earnings season in Europe starts this week. The sharp rise of the European indices last week implies further upside for now.

COMPANY PREVIEW

Exxon Mobil (USD 61.29 ; 1.26% ; XOM ; XOM.N)

Today Exxon Mobil is scheduled to release 4Q earnings. The market is looking for a profit per share of $1.44. The group raised its quarterly dividend payment by 10.3% to $0.32 from $0.29 per share recently.

Ericsson (B) (SEK 26.9 ; 3.07% ; ERICB ; ERICb.ST)

Ericsson releases its 4Q data on Tuesday. Estimated pre-tax profit of SEK10.38bln, up from SEK8.17bln same time last year. Outlook for 2006 will be the focus of the report as even if the company reiterates guidance for global growth between 5%-9%, the recent sharp drop in the value of the $ versus the krona and costs relating to Marconi's acquisition are expected to hamper 2006 revenue.

Altria (USD 74.73 ; -0.15% ; MO ; MO.N)

Later on the same day Altria will publish its 4Q results. EPS is expected to rise 6% to $0.53 on revenue up 9% to $9.3bln. Earlier in the quarter, Altria reaffirmed its FY 05 EPS forecast at the high end of the $5.05 to $5.10 range and projected more than $54 billion in cumulative cash flow in the five years through 2009.

Time Warner (USD 17.29 ; 1.29% ; TWX ; TWX.N)

On Wednesday Time Warner reports is 4Q results. EPS expected at $0.22 on revenue of $11.9bln. Much of the focus will be on AOL, especially after Google was prepared to pay a $1bln for a 5% stake in the company. The company's CEO may reiterate his view over the negative impact a break up of the company would have.

Deutsche Bank (EUR 86.6 ; 4.19% ; DBK ; DBKGn.DE)

And finally on Thursday Deutsche Bank reports its 4Q data. The bank is expected to report pretax profit between E1.25bln and E1.65bln, up from E301m same time last year due to a strong performance by its investment banking unit.