US equities may slide this week

MARKET OUTLOOK

- US :US markets fell last week driven by mixed earnings reports, concern about higher inflation and therefore more rate hikes. Oil prices traded higher as tension with Venezuela and Iran mounted. The Dow Jones, S&P 500 and Nasdaq 100 broke below their 20D & 50D MAs which could entail further downside this week.


- EUROPE: European markets were mixed last week, the Cac 40 and Ibex rose while the Dax and FTSE 100 declined. JC Trichet continued to prepare the market for a March rate hike. The earnings season will accelerate in Europe this week. Yet, European indices could remaining under pressure as some bullish gaps remain to be filled (Cac 40 & Dax).



COMPANY PREVIEW

Walt Disney (USD 25.01 ; -0.28% ; DIS ; DIS.N)

On Monday Disney reports its 1Q results. The market is looking for a profit per share $0.30 on revenue of $8.79bln. The focus will be on whether Pixar's recent acquisition, and subsequent price tag, will water down profits for 2006. Citadel Broadcasting is about to buy most of Disney's radio assets for $2.7bln in cash and stock according to the Wall Street Journal, TThe deal could be announced tomorrow.


BP (GBp 658.5 ; -1.05% ; BP/ ; BP.L)

On Tuesday BP publishes its 4Q data. The group is expected to report replacement cost net profit, including non-operating items of $5.6bln up from $4.76bln previously. Full year profit should reach $21bln-22bln, still lagging Royal Dutch Shell's $23bln.


Cisco Systems (USD 18.15 ; -3.36% ; CSCO ; CSCO.O)

Later on the same day Cisco releases its fiscal 2Q results. The group is expected to report a 12% rise in EPS to $0.25 from a year earlier on a revenue increase of 9% to $6.62bln. Full year sales are estimated to have risen by 11%, with earnings rising 10%.


Glaxosmithkline (GBp 1448 ; -1.43% ; GSK ; GSK.L)

On Wednesday GlaxoSmithKline publishes its 4Q data. Pretax profit of £1.46bln (EPS 18.1 pence) on revenue £5.64bln is expected. Sales of key drugs such as asthma treatment Seretide are expected to have surged 18% YoY. GlaxoSmithKline could bid as much as $11bln for Serono reported the Sunday Times.


Pepsico (USD 57.34 ; -1.48% ; PEP ; PEP.N)

And finally on the same day PepsiCo reports its 4Q earnings. The market is looking a profit per share of $0.65 on revenue of $9.56bln. The group recently acquired Poland's number one seller of potato chips Star Foods for an undisclosed amount.