What to Watch in the Week Ahead and on Monday, Sept. 29

Fri Sep 26, 2014 3:55pm EDT
 
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article
[-] Text [+]

(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) WEEK AHEAD A rush of data next week will offer fresh clues on the U.S. economy's health in the third quarter. On Wednesday, the Institute for Supply Management is expected to report that its national manufacturing index dipped to 58.5 in September from a reading of 59 in August. Automobile manufacturers are expected to report sales slowed to a 16.8 million-unit rate in September from a brisk 17.53 million unit-pace in August. On Friday, the Labor Department is expected to report that nonfarm payrolls increased 219,000 in September after rising 142,000 in August. The unemployment rate is seen holding steady at 6.1 percent. The ISM is expected to report that its nonmanufacturing index eased a bit to 59.0 in September from 59.6 in August. After a torrent of remarks from Federal Reserve officials over the past week, financial markets will have much less to digest in the week ahead. On Tuesday, Federal Reserve Board Governor Jerome Powell participates in panel to discuss paper, "Government Debt Management at the Zero Lower Bound" before the Hutchins Center on Fiscal and Monetary Policy in Washington. St. Louis Fed chief James Bullard, who speaks on Thursday, is unlikely to shift his view that the Fed should start tightening monetary policy late in the first quarter of next year. Perhaps of greater interest will be a paper former Obama adviser Lawrence Summers and co-authors will present on Tuesday on government debt management when interest rates are near zero; Fed Governor Jerome Powell is among the discussants. Separately, on the same day, Federal Reserve Bank of Atlanta President Dennis Lockhart gives opening remarks before the Federal Reserve Bank of Atlanta Center for Human Capital Studies conference, "Employment and Social Insurance". Constellation Brands is expected to report second-quarter results before markets open on Thursday. For the previous quarter, the company reported higher-than-expected quarterly revenue, helped by increased sales of its beer brands such as Corona and Modelo. Analysts expect earnings per share to increase to $1.15 from the previously announced 96 cents. Sprint's CFO, Joe Euteneuer, is scheduled to speak at the Deutsche Bank 22nd Annual leveraged Financial Conference on Wednesday. The third-largest wireless company has been reeling from a collapsed bid for T-Mobile. Under new CEO Marcelo Claure, the company has engaged in a series of aggressive price discounts aimed at recovering subscribers lost during a network overhaul that caused gaps in service. On Friday, FMSA Holdings is expected to debut. The company's initial public offering is expected to raise up to $1.07 billion at the top end of the expected price range. FMSA, which provides sand and sand-based products to oil and gas exploration and production companies, is owned by private equity firm American Securities. Ohio-based FMSA would be valued at about $4 billion at the top end of the expected price range. On the same day, financial service platform Yodlee Inc is expected start trading. The company is expected to be valued up to about $368.2 million at the top end of the range of $11-$13 per share. The company is offering 6.3 million shares and is expected to raise up to $81.3 million. The company, which has private equity firm Warburg Pincus and Bank of America among its main investors, counts 9 out of the 15 largest banks in the U.S. as customers.

On Thursday, Vivint Solar's shares are expected to begin trading. The Blackstone Group LP-controlled residential solar panel installer will be valued at $1.9 billion at the top end of the expected range of $16-$18 per share. Vivint Solar is offering all the 20.6 million shares in the IPO and, at the expected pricing, will raise up to $370.8 million. Vivint Solar competes with SolarCity Corp, which is backed by Tesla Motors founder Elon Musk. Blackstone's stake in Vivint Solar will fall to 75.3 percent from 97 percent after the offering, if the underwriters buy additional shares. Online home-furnishings retailer Wayfair Inc's debut is also expected on the same day. The company will be valued at $2.32 billion at the top end of the expected range of $25-$28 per share. The offering of 11 million class A common shares is expected to raise up to $308 million, with Wayfair offering 10.5 million shares. The Boston-based company owns brands such as online flash sales site Joss & Main, furnishings websites Dwell Studio and Birch Lane. Enbridge Inc, Canada's No.1 pipeline company, holds its annual investor day on Tuesday. The company will update plans for its contentious Northern Gateway pipeline in northern British Columbia and on its efforts to double capacity of its Alberta Clipper oil export line to the United States that also faces opposition from green groups. Economic focus in Canada next week will be on the monthly gross domestic product report on Tuesday, with economic growth forecast to cool slightly to 0.2 percent in July. The trade balance report for August will also grab the market's attention when it is released on Friday. The country's trade surplus is expected to pull back to C$1.60 billion from a near six-year high the month before. Exports are also expected to slow slightly to a still-strong C$44.9 billion from a record level in July. The strength of the export sector is closely watched by economists as the Bank of Canada is looking for exports and business investment to become a stronger driver of economic growth. On Tuesday, Mexican data will show how the fiscal balance fared in August, following a 93 billion peso deficit in July. On Wednesday, a central bank survey of analysts will reveal expectations for growth and inflation this year, after economists hiked their inflation outlook and lowered their growth expectations in a prior poll earlier this month. HSBC manufacturing PMI data out the same day will show if factory sentiment continued to rise in September, after touching a seven-month high the prior month on growth in output and employment. On Friday, the National Statistics Institute will release consumer confidence data for September, after the measure fell in August to its lowest level in six months as shoppers grew gloomier about their ability to buy big-ticket items. The government of Chile President Michelle Bachelet will present its budget for 2015 on Tuesday. Public spending is set to grow significantly, as the new center-left government looks to boost what is expected to be a slow recovery after this year's rapid slowdown. Copper income has fallen with a slide in the price of the metal, but the government still has sovereign wealth fund piggy banks, possible more debt issuances, and over $2 billion from its new tax reforms to call upon. MONDAY, SEPTEMBER 29 The Commerce Department is expected to report that consumer spending rebounded 0.4 percent in August after dipping 0.1 percent in July (0830/1230). Income is forecast increasing 0.3 percent after July's 0.2 percent gain (0830/1230). The National Association of Realtors will release its Pending Home Sales Index for August (1000/1400). Federal Reserve Bank of Dallas issues Texas Manufacturing Output Index for September (1030/1430). Federal Reserve Bank of Chicago President Charles Evans participates in live interview on the economy during CNBC's "Squawk Box" broadcast (0800 /1200). Soon after, Charles Evans and Treasury Deputy Secretary Sarah Bloom Raskin speak on the economy before the National Association for Business Economics annual meeting in Chicago (0900/1300). Salix Pharma's constipation drug, Relistor, is slated for an FDA decision regarding a label expansion for its use in patients on opioids for pain unrelated to cancer. The label expansion for subcutaneous injection was earlier rejected by the agency in 2012, pending additional data. While the decision is widely expected to be positive, the FDA recently approved an oral drug developed by AstraZeneca and Nektar Therapeutics to treat the same patient population. The oral drug is expected to capture a greater share of the market by virtue of ease of administration. Brazil central bank releases its quarterly inflation report. In the report, the central bank will give its latest macroeconomic estimates for 2015 and 2016. The bank will likely cut its economic growth forecast for 2014 and 2015 and keep its annual inflation estimates stable. The report could also give more clues on the future path of monetary policy as the central bank has opted to keep interest rates stable so far (0700/1100). (All analysts' estimates are according to Thomson Reuters I/B/E/S/) (Compiled By Nandi Kaul in Bangalore; Editing by Sriraj Kalluvila)