Job report dents US stocks

MARKET OUTLOOK

- US: US markets closed on a slight negative note on Friday after a weaker than expected July job report (113,000 jobs created versus 144,000 expected and a 4.8% unemployment rate versus 4.6% anticipated). Markets had started up before giving up to the bears. Bonds traded higher and the dollar weakened further against the euro.

The Fed is meeting on August 8 and the market is split on whether a pause will occur. The majority of analysts are looking for a status quo at 5.25% while a few expect a 25bps rate hike to 5.50%. A pause could initially raise concern that the Fed went too high in raising interest rate and lead to weakness for equity markets. Week on week, stocks from the retailing, household & personal products and material sectors gained most. Tuesday's FOMC meeting will be key for the rest of the week.

- EUROPE: European markets were slightly higher last week with the most noticeable exception of the FTSE which suffered from a surprise rate hike from the BoE. The ECB raised interest rate by 25bps as expected. Stocks from the insurance, telecom and construction rose while stocks from the technology, energy and healthcare sectors were under pressure.

With the euro trading higher and long yields rebounding their could be some weakness in equity markets although from a technical stand point, they hold up well above their 20D & 50D moving averages. Caution should still prevail under these circumstances.

COMPANY PREVIEW

News Corp (USD 19.05 ; -1.04% ; NWS/A ; NWS-A.N)

News Corp is delivering its 4Q earnings on Tuesday. The market is expecting an EPS of $0.23, compared to $0.22 a year ago, on a revenue of $6.75bln, against $6.11 same time last year. The international media company has forecast an 8% rise in full-year EBIT on the back of strength in its TV, film and cable TV operations.

Cisco Systems (USD 17.24 ; -4.65% ; CSCO ; CSCO.O)

Cisco reports its 4Q results on Tuesday, after market. The market expects an EPS of $0.28, compared to $0.25 a year ago, on revenue reaching $7.92bln, against a $6.58bln on the same period last year. The group was recently downgraded to Neutral from Outperform at Baird, while target price was cut to $19 from $25.

Walt Disney (USD 29.9 ; 0.67% ; DIS ; DIS.N)

Walt Disney reports its results on Wednesday. The market is expecting EPS $0.44, compared to $0.42 a year before, on revenue increasing to $8.60bln, from $7.71bln same time last year. The group's ABC radio unit announced that it plans to exercise an option buy a New York station, from the New York Times for $40m.

AIG (USD 60.07 ; -1.36% ; AIG ; AIG.N)

American International Group is scheduled to report 2Q results on Wednesday, after market. EPS is expected at $1.39, against $1.27 same time last year, on revenue reaching $29.2bln, compared to $26.86bln a year before. The group was recently rated "hold" by Citigroup.

Danske Bank (DKK 229 ; 1.78% ; DANSKE ; DANSKE.CO)

Danske Bank announces its 2Q results on Thursday. The market is expecting net income of DKK2.82bln, on revenue of DKK8.75bln. Fitch affirmed the bank's outlook (stable) and rating (AA-) on Thursday August 3rd.