What to Watch in The Day Ahead; Tuesday, April 29
(The Day Ahead is an email and PDF publication that includes the day's major stories and events, analyses and other features. To receive The Day Ahead, Eikon users can register at . Thomson One users can register at RT/DAY/US. All times in ET/GMT) The Federal Open Market Committee is scheduled to begin a two-day meeting on interest rate policy, with all signs pointing to another $10 billion cut to the simulative asset purchases and no change to a longer-term plan for low interest rates. With economic data having bounced back from a tough winter and markets relatively quiet, policymakers could take the two-day meeting to quietly debate the level of slack in the labor market, lurking inflation pressures, and exactly what economic conditions would finally prompt the Fed to raise rates.
The Senate Banking Committee is set to vote on President Barack Obama's nominees for the depleted Fed board: Stanley Fischer for vice chair; Lael Brainard for one of the vacant governor spots; and sitting Governor Jerome Powell, who needs to be reconfirmed.
Dow component Merck's first-quarter earnings are expected to fall sharply due to generic competition for its Singulair asthma medicine. Investors will be paying close attention for hints from second largest U.S. drugmaker that it might be willing to divest its animal health or consumer healthcare businesses.
Ebay is expected to report first-quarter earnings of 67 cents per share after the bell. The quarterly report comes as activist-investor Carl Icahn's campaign to spin out PayPal fades. Ebay's largest shareholder and founder supports the company's current strategy, and analysts expect he will convince shareholders to keep PayPal under eBay. Investors will also look for a clearer readout on eBay's mobile and international efforts.
The S&P Case/Shiller Home Price Index of 20 metropolitan areas is expected to have slipped 0.7 percent in February from the prior month. The index likely went up 13.0 percent from a year ago. (0900/1300) Separately, the Conference Board's consumer confidence index is expected to show consumers feeling more upbeat about the economy and their finances in April. (1000/1400)
Cancer and arthritis drugs are expected to lift Bristol-Myers Squibb's first-quarter earnings, but an experimental newer wave of cancer drugs that work by boosting the immune system will get star billing as the company discusses corporate strategy with investors.
After a rapturous IPO and several heady months, the investor sentiment in recent months around Twitter has been subdued with shares down 40 percent, and the mood could quickly sour when it reports first-quarter results. The key figure to watch is Twitter's user growth, which all but ground to a standstill during the fourth quarter. Much of Twitter's $25 billion valuation has been predicated on the assumption that it could grow into a global communications utility, but data continues to suggest it has a future as only a niche social network. Aside from an update on user numbers, investors will want to hear CEO Dick Costolo talk in greater detail about the design tweaks he has planned to make Twitter more appealing to a mass audience.
Independent refining company Valero is scheduled to report first-quarter earnings before the bell. The company is expected to benefit from higher margins, thanks to easy access to low- cost U.S. shale crude. While refining margins are expected to have improved quarter-over-quarter, Valero could be hurt by higher prices for Renewable Identification Numbers. The company's cash operating costs will also likely rise due to higher natural gas prices.
Express Scripts is expected to report first-quarter earnings of $1.01 per share. In the last quarter the company's profit matched analysts' average estimate and it forecast 2014 earnings in line with Wall Street expectations. Continued...