European and US markets decline

MARKET OUTLOOK

- US: US markets closed in the red on Friday due to concern about rising inflation and slower economic growth. It was a rather broad based decline with stocks from the consumer durables, real estate and transportation sectors leading. Stocks from the household and personal products and energy sectors were the most noticeable gainers. The Fed's decision to leave interest rates unchanged, for now, in a split decision was interpreted negatively by the market. Caution should prevail as upside momentum seems weak for now.

- EUROPE: European markets declined week-on-week following a foiled terrorist attack on air transatlantic routes between the UK and the US. Stocks from the industrial goods, basic resources and telecom sectors fell more than 2% WoW. Results from Deutsche Telekom were disappointing and this weighted on the telecom sector as a whole. There will be few economic reports out in Europe this week, so the focus of investors will be on the corporate and geopolitical front. As for the US, the trend in Europe is uncertain.

COMPANY PREVIEW

E.ON (EUR 96.3 ; -0.16% ; EOA ; EONG.DE)

E.ON delivers 2Q results on Tuesday. The group is expected to release a revenue of E15.10bln, up 31.4%. Berliner Zeitung said on Friday after market that the utility group plans to increase electricity price at some of its regional providers.

UBS (CHF 65.7 ; -0.91% ; UBSN ; UBSN.VX)

UBS reports 2Q results the same day. The group is expected to release a net profit of SF2.73bln, up 27%. Net revenue may reach SF11.3bln, compared to SF9.09bln in the same period last year. The stock is trading just above its 20D & 50D MAs.

Home Depot (USD 33.27 ; -4.15% ; HD ; HD.N)

Home Depot reports 2Q results on Tuesday, before market, with an expected EPS of $0.922, compared to $0.82 in the same period last year. Revenue should reach $25.523bln, up 14.1%. The group is creating a new unit to increase orders from professional customers in the US $400bln a year wholesale building-supply market (WSJ).

Wal-Mart (USD 44.69 ; -0.4% ; WMT ; WMT.N)

Wall-Mart delivers 2Q results on Tuesday, before market. The group is expected to release an EPS of $0.72, compared to $0.67 in the same period last year. Revenue should reach $86.27bln, up 9.46%. In its Lex column, the FT said on August 11 that the stock was not cheap due to intense price competition among retailers in the US.

Hewlett Packard (USD 33.05 ; 1.88% ; HPQ ; HPQ.N)

Hewlett-Packard announces 3Q results on Wednesday. The group is expected to release an EPS of $0.47, compared to $0.36 in the same period last year. Revenue should reach $21.8bln, up 5%.