RANSquawk Equity Weekly Outlook

Discussion in 'Trading' started by Ransquawk, Nov 26, 2007.

  1. Ransquawk

    Ransquawk ET Sponsor


    In the FTSE the mining sector continues to be in focus following on from the recent merger proposal by BHP Billiton for rival Rio Tinto. Last week also saw Vendanta Resources become a take over target on speculation that a Chinese company may be interested in a stake which prompted industry experts to comment that they expect further consolidation in the sector given the current environment. Mergers amongst the big Western based mining stocks appears almost inevitable now in order to fend off there booming Eastern counterparts so look for further rumours to do the rounds this week.

    In the current volatile conditions and with financial based stocks getting hit hard of late, the defensives such as the large cap pharmaceuticals have been performing well recently. As mentioned with many investors currently spooked by the recent turmoil shares in the likes of Glaxo and AstraZeneca showed strong gains at the end of last week. The sector has also been given a boost by an upgrade of the healthcare sector to neutral by Citigroup so the trend may be set to continue.

    For financials, UBS will be under pressure again following weekend press reports that the investment bank have said they expect another USD 5bln write-down in Q4, on top of the USD 4.4bln in the previous three quarters.

    Compass Group, Johnson Matthey, Sage Group and DSG International are all due to report their H1 earnings, with retailer Kingfisher proving a Q3 trade update on Thursday.


    This week will see the US players back to their desks following the thanksgiving holidays so liquidity should be back to normal in the US markets. For the retailers we will be on the look out for figures as to how successful last week’s black Friday was, the busiest day in the shopping calendar and marking the start of the Christmas season.

    For Financials, Merrill Lynch’s new chief John Thain is preparing for a sweeping reform of its fixed-income division, which may involve a large amount of job cuts so be vigilant on any announcements. Recent press has also speculated that Thain will announce any other

    problems as soon as possible in order to begin his reign with a clean sheet heading into the new year.

    Elsewhere, US plane maker Boeing continues to benefit since unveiling its newest jet. So far the company is set to smash all records this year by clocking up 1,047 net orders by the end of last week. Arch rival Airbus has recently been slated in the press announcing the possibility of mass job cuts and a change in its business models due to the effects of the current USD value. This could provide an excellent opportunity for Boeing to push its competitive advantage heading into next year.

    Finally, corporate results in focus this week will be Dell Inc, Sears Holdings and Staples Inc.