Wall Street firms boost equities

MARKET OUTLOOK

- US: US markets rose last week thanks to strong results from Wall Street firms and a better than expected inflation report. Long yields declined from their recent highs and the dollar fell against the euro. Stocks from the energy and real estate sectors rose. Watch tomorrow's February PPI data for further information on inflation. Technically, US markets remain well oriented for now with the Nasdaq lagging the Dow Jones and S&P500.

- EUROPE: European markets rose last week, driven by strong gains in the financial services and insurance sectors. The earnings season will continue and M&A activity should remain under the spotlight (remember Friday's talks about a possible interest on Zurich Financial Services from US based St Paul Travelers).

Technically, European markets should keep their upside momentum but are heading towards major horizontal resistance (the Cac 40 is near a 61.8% retracement of the September 2000 - March 2003 drop). New long positions should be taken cautiously.


COMPANY PREVIEW

Morgan Stanley (USD 60.26 ; 1.93% ; MS ; MS.N)

On Wednesday Morgan Stanley publishes its 1Q results. EPS is seen at $1.20 per share, however the recent record-breaking results published by Bear Stearns, Lehman Brothers and Goldman Sachs will put pressure on the group to deliver results well above consensus.

Fedex Corp (USD 114.94 ; 2.62% ; FDX ; FDX.N)

Later on the same day FedEx delivers its 1Q results. The market is looking for a profit per share of $1.30, up from $1.03 same time last year on revenue of $8.03bln, an 8% increase on last year's results.

Unicredito Italiano (EUR 6.09 ; 0.91% ; UC ; CRDI.MI)

Unicredito Italiano scheduled to release its FY results on the same day. Investors are likely to focus on any details on the situation in Poland. The bank's CEO recently announced he was 'optimistic' about reaching a compromise solution with the Polish government about its plan to complete the takeover of HVB Group's BPH Bank.

Enel (EUR 6.992 ; 0.37% ; ENEL ; ENEI.MI)

Enel scheduled to release FY results later that day. FY results are likely to be overshadowed by any relevant news on Suez-Gaz de France merger.

Generali (EUR 32.08 ; 2% ; G ; GASI.MI)

And finally on Thursday Generali reports its FY results. The stock price target was recently raised to E32 from E29 by Citigroup. Net income for 2005 is seen rising to E1.87bln from E1.31bln.