US decline calls for caution

MARKET OUTLOOK

- US: US markets were slightly up but Friday's decline calls for caution. The earnings season kicks off this week and with rising long term yields (the 10yr reached 4.97%, its highest levels since June 2002) and rebounding oil prices any disappointing data could trigger further downside. Unless markets rise above Friday's highs, expect a consolidation with week.


- EUROPE: European markets became under pressure towards the end of the week. The FTSE 100 and SMI were the only major indices rising. The rebound of the euro could soon pressure exporting firms and a decline on Wall Street could add to the negative sentiment. Stocks from the food and beverage and insurance sectors declined last week. There are barely no major European corporate reports expected this week so watch Wall Street.



COMPANY PREVIEW


Alcoa (USD 32.5 ; 6.35% ; AA ; AA.N)

On Monday Alcoa scheduled to release its 1Q results. Credit Suisse recently raised its FY earnings per share forecast by $0.41 to $2.16 as the bank forecast metal prices to continue to rise amid supply constraints.


Gannett (USD 59.42 ; -0.83% ; GCI ; GCI.N)

On Wednesday, before the US market opens, Gannet posts its 1Q earnings. The market is looking for an EPS of $0.99, down from $1.05 same time last year on revenue of $1.87bln, up from $1.79bln in the year earlier period.


Harley Davidson (USD 52.45 ; 1.1% ; HDI ; HDI.N)

Another company to publish its 1Q results before the market opens on the same day is Harley Davidson. The group recently posted a 10% growth in sales for the months of January and February at the dealer level, but insisted the increase was not a "full year trend".


General Electric (USD 34.03 ; -2.16% ; GE ; GE.N)

On Thursday General Electric publishes its 1Q earnings. EPS is expected to have risen to $0.39 from $0.33 same time last year, while revenue expected to dip to $37.36bln from $39.41bln a year earlier. The stock's target price was recently lifted to $44 from $42 by Morgan Stanley. This is a key report and a good indicator of the strength of the US economy.


American Standard (USD 41.5 ; -3.17% ; ASD ; ASD.N)

And finally on Friday American Standard Companies reports its 1Q results. EPS is seen dropping to $0.40 from $0.47 a year earlier on revenue which is expected to rise by 6% to $2.48bln. Deutsche Bank raised its target price on the stock last week by $6 to $48.