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US EARNINGS WILL GIVE THE MARKET FRESH DIRECTION

MARTIN SLANEY<br /><strong>HEAD OF DERIVATIVES, GFT</strong><br /><br />THE fate of the markets over the coming weeks hangs on the second-quarter results being announced daily by US companies. The market&rsquo;s take so far has been positive &ndash; approximately 80 per cent of earnings have beaten or were on a par with consensus, and last Wednesday Intel was proof of the significance of these numbers.<br /><br />The world&rsquo;s largest chip maker announced its results on Tuesday night after the stock markets closed and they came in well beyond the whisper, as well as giving a highly positive outlook for the next quarter. Due to the timing of the announcement, traders had a whole night to scrutinise the good news and, in a technology-led buying frenzy, US stocks rallied the most in three months. The Dow ended up over 250 points, a veritable gold mine for CFD day traders.<br /><br />Those who are trying to predict which stock is going to be the big market-mover this week have a large and diverse range of blue chips to choose from, since more than a third of the Dow is set to report. Texas Instruments, Apple, Caterpillar, Yahoo, Microsoft, Amazon, UPS, Coca-Cola, Morgan Stanley, Wells Fargo and more are all lined up to deliver a potential boost or bust to the markets. <br /><br />The banking and technology sectors have so far taken centre stage and I think investors will continue to look to the techs and financials to spur any move higher. But a dose of disappointment from manufacturing and industrial stocks&rsquo; outlooks could trigger a downwards move. <br /><br />So Texas and Caterpillar are crucial for determining direction this week. Caterpillar&rsquo;s numbers are out before the US open today, and the picture is rather bleak, with several analysts recently slashing profit estimates. But Texas Instruments, which issued its results after the close last night could have exceeded already strong estimates. <br /><br />So eyes down for a full house &ndash; this could be the most important day of the most important week in the most important earnings season for a decade.