Bullish US markets make gains

MARKET OUTLOOK

- US: US markets closed higher on Friday for the fifth day in a row, despite early weakness driven by gains in the energy (oil prices rose for the first day of the week) and technology (Microsoft's 4.4% jump) sectors. Week-on-week, the Nasdaq 100 jumped 6% driven by strong gains in the semiconductors and technology hardware sectors. There is growing optimism that the Fed will not raise interest rates further as recent economic data points at contained inflation and slower economic growth. Technically, the US indices seem to be able to maintain their upside momentum for now although a pause could shape early in the week.

- EUROPE: European markets benefited from the bullish tone of Wall Street and good corporate news in the old continent. The Cac 40 and Dax gained more than 3%, while the FTSE 100 added 1.4% week-on-week. The technology, automobile and industrial sectors were the main drivers of the rise. Only the energy sector posted a decline as oil prices continued to drop. Technically, the European indices seem able to reach their recent highs before a consolidation can be considered.

COMPANY PREVIEW

Lowe's Cos (USD 29.52 ; 5.05% ; LOW ; LOW.N)

Lowe's Companies is expected to deliver today before market 2Q/Jul EPS of $0.605 ($0.53 a year ago) on a revenue of $13.37bln ($11.92bln). Last month, the group was downgraded to "neutral" from "buy" at UBS.

Medtronic (USD 45.53 ; 5.74% ; MDT ; MDT.N)

Medtronic is expected to announce on Tuesday 1Q/Jul EPS of $0.54 ($0.50 a year ago) on a revenue of $2.9bln ($2.69bln). The group announced on August 16 the worldwide launch of a unique Medtronic CG Future(R) Composite Annuloplasty Ring that repairs, rather than replaces, a narrowed or leaking mitral valve. Coern Stuge, President of the Cardiac Surgery business at Medtronic said: "This one-of-a-kind product was created with the patient and their implanting surgeon in mind. The composite design offers semi-rigid remodelling of the posterior portion of the mitral annulus with flexibility across the anterior, both of which are important in helping return patients to a normal functioning mitral valve after their surgery."

Bhp Billiton (GBp 1032 ; 4.99% ; BLT ; BLT.L)

BHP Billiton is expected to report on Wednesday FY EPS of $1.71 ($0.98 a year ago) on a revenue of $35.7bln ($29.6bln a year ago). Last Friday, the group stopped production at the Escondida mine in Chile, after roads were blocked, pushing copper prices higher. The group announced that it would take legal action against the Escondida Union. However, the international resources company is not locking out workers, and seeks Escondida work to resume "as early as possible".

Nestle (CHF 404.75 ; -0.8% ; NESN ; NESN.VX)

Nestle is expected to deliver on Wednesday FY EPS of SF23.3 (SF20.5 a year ago) on a revenue of SF97.5bln (SF91.07bln). On Friday, the group was raised to "hold" from "sell" by Societe Generale. The food producer's CEO Peter Brabeck said he plans to turn the company into a nutrition and wellness business. In other news, Nestle agreed to buy Jenny Craig in June for about $600m.

Holcim (CHF 99.2 ; 5.03% ; HOLN ; HOLN.VX)

Holcim is expected to report on Thursday 2Q/Jul EPS of SF2.58 (SF2.25 a year ago). Earlier this month, the group was raised to "buy" from "hold" at Deutsche Bank. Technically, the stock is above its rising 20d and 50d moving averages but facing a resistance area at SF100. Only the rise through it will allow for a continuation of the rise to SF105/107 then SF110 and SF112.58 (record high).