Inflation concerns hit US stocks

MARKET OUTLOOK

- US: Last week strong reports from the Institute for Supply Management on the services and manufacturing sections of the economy fuelled concern about inflation risk in the US.

The Dow Jones and S&P fell driven by declines in the financial sector while the Nasdaq managed to close in the green thanks to anticipation of better than expected first quarter results in the tech sector.

The 10-year bond yield reached a 52-week high and oil prices jumped to a four-week high. Friday's employment report will be closely watched for future interest rate moves. Technically, US markets remain well oriented for now.

- EUROPE: European markets consolidated their recent gains last week despite a bounce from Vodafone on optimism it could sell its Japanese unit and strong earnings from LVMH. The focus remained inflation as for the US.

The ECB raised its benchmark rates to 2.5% and prepared the market for further hikes. Investors expect 2.75% in June and 3% in September. Two-year bond yields rose to their highest since December 2002.

On the corporate front, Elan Corp and Biogen Idec shares will not trade on March 7 and 8 pending a US FDA review on their Tysabri drug. Technically, European markets should keep their upside momentum.


COMPANY PREVIEW

Albertson's (USD 25.38 ; -0.24% ; ABS ; ABS.N)

On Tuesday Albertson's is scheduled to release its 4Q results. EPS expected to drop to $0.45 from $0.51 same time last year, just as revenue which is expected to fall to $10.48bln from $11.08 in 2004.

Credit Agricole (EUR 30.6 ; 1.22% ; ACA ; CAGR.PA)

On Wednesday Credit Agricole will deliver its FY earnings. The bank is expected to report a rise in net income to E3.78bln from E2.61bln last year, while 4Q revenue is expected to surge by 24% and operating revenue by 75%, boosted by commissions stemming from EDF's IPO.

EON (EUR 90.23 ; -4.77% ; EOA ; EONG.DE)

On Thursday E.ON reports its FY results. Net income is seen rising 85% to E6.34bln on revenue of E52.35bln. E.ON announced it would pursue its E29.1bln takeover bid for Endesa 'as long as it takes' after the Spanish government passed measures to hamper the bid.

Suez (EUR 31.2 ; -7.94% ; SZE ; LYOE.PA)

On the same day Suez delivers its FY results. Net income is seen at E1.93bln on revenue of E41.52bln. The main focus of the report is likely to be the latest developments in its proposed merger with GDF, as well as Enel's and the European Union's response to the merger.

Carrefour (EUR 40.97 ; -0.7% ; CA ; CARR.PA)

And finally Europe's largest retailer Carrefour is expected to post its 2005 figures on the same day. Net income is expected to rise 4.1% to E1.77bln, sales rose 6.1% to E83.7bln as previously stated by the company. Outlook for 2006 is expected to be positive.