Dow Jones hits record high

MARKET OUTLOOK

- US: US markets closed slightly down on Friday after a neutral September employment report (lower than expected nonfarm payrolls but upward revision for August). Week-on-week, the Dow Jones rose 1.46% and reached a new record high. The S&P500 reached a new 52 week high. Last week gains were driven by stocks from the consumer services, retailing and transportation sectors, benefiting from lower oil prices. On the downside, stocks from the energy and food and staples retail. were under pressure. Technically, US indices remain well oriented above their rising 20d moving averages. It is Columbus Day today but exchanges are open, yet expect trading volume to be light. The 3Q earnings season kicks off this week so there should be plenty of corporate news in the weeks ahead.

- EUROPE: European markets rose, helped by a positive Wall Street and strong gains in the retail, banks and financial services sectors. Oil and gas shares fell but could rebound this week after six Opec countries agreed to cut production during the weekend. As expected, the ECB raised interest rate by 25bps to 3.25%. There will be few earnings reports this week so economic and geopolitical news (report of a Nuclear test in North Korea) should pace the market. Technically, above their 20d moving averages, European indices keep their positive momentum.

COMPANY PREVIEW

Alcoa (USD 27.74 ; -1.07% ; AA ; AA.N)

Alcoa reports on Tuesday 3Q/Sept results, with expected EPS of $0.784 ($0.33 a year ago) on a revenue of $7.684bln ($6.566bln) with aerospace and power generation offsetting likely reduced demand for automotive aluminium. Investors will also watch raw material costs and pricing power.

Unicredito Italiano (EUR 6.681 ; 2.08% ; UC ; CRDI.MI)

Unicredito Italiano delivers its 3Q/Sept results on Tuesday. EPS for the period is seen at E0.095 (E0.108 a year ago). On October 4, the group sold its 4.8% stake in Olimpia to Pirelli. Friday the stock closed at a record high, technically it remains well oriented, supported by its rising 20d and 50d moving averages.

Monsanto (USD 47.19 ; 0.38% ; MON ; MON.N)

Monsanto will announce its 4Q/Aug results on Wednesday before market. The Street expects a 4Q loss per share of $0.21 (loss of $0.25 a year ago) on a revenue of $1.335bln ($1.274bln). On October 4, the group said an experimental corn seed that produces drought-tolerant plants may boost yields in dry parts of the US by 40% in the next decade.

Pepsico (USD 64.42 ; -1.29% ; PEP ; PEP.N)

PepsiCo will deliver on Thursday its results. 3Q/Aug EPS is seen at $0.86 ($0.78 a year ago) on a revenue of $8.795bln ($8.184bln). On October 4, BT Group won a 7Y contract to manage PepsiCo's telecommunications network, and HP announced it had signed a 7Y global services agreement with PepsiCo to provide data centre management services and infrastructure consolidation for the company's PepsiCo International division.

General Electric (USD 36.14 ; 2.38% ; GE ; GE.N)

General Electric reports its 3Q/Sept results on Friday. The market sees EPS of $0.49 ($0.43 a year ago) on a revenue of $39.898bln ($41.580bln). On October 5, GE and Silex Systems won US government approval for an agreement to develop a new process to enrich uranium for nuclear reactors.