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WEEK AHEAD The markets are getting through a bout of volatility that leaves them in a position similar to where things were before Bill Gross' surprise resignation: weak growth overseas continues to push investors into safe-haven government debt in the United States, the equity market remains somewhat jittery with earnings on the way, and investors expect the dollar to maintain its recent strength. Alcoa and Monsanto are scheduled to report quarterly results on Wednesday.
Yum! Brands will report third-quarter results after the closing bell on Tuesday. The company has already warned that same-restaurants sales in its all-important China market were down 13 percent for the third quarter ended Aug. 31 due to a supplier scandal that has devastated sales for KFC, Pizza Hut and McDonald's. Investors will be looking for signs that the crisis is abating.
The Federal Reserve will release minutes of its mid-September policy meeting on Wednesday that could yield clues on how dramatically the central bank may overhaul its interest rate guidance later this month.
Closing arguments are scheduled on Thursday in a lawsuit by the U.S. government and 17 states accusing American Express of stifling competition from credit card providers that charge lower processing fees. The trial is before U.S. District Judge Nicholas Garaufis of Brooklyn.
Federal Reserve Bank of Richmond President Jeffrey Lacker speaks on "Rethinking the Unthinkable: Bankruptcy for Large Financial Institutions" before an American Bankruptcy Institute luncheon at the National Conference of Bankruptcy Judges annual meeting on Friday. Federal Reserve Bank of Minneapolis President Narayana Kocherlakota speaks on "Clarifying the Objectives of Monetary Policy" before an event sponsored by the Rapid City Economic Development/Black Hills Knowledge Network on Tuesday. Federal Reserve Bank of San Francisco President John Williams speaks on the economic outlook before a Las Vegas business and community leaders luncheon on Thursday.
The International Monetary Fund holds a news briefing Tuesday on the World Economic Outlook along with IMF chief economist Olivier Blanchard and IMF Economic Counselor and Director of Research Department Thomas Helbling. On Wednesday, IMF Managing Director Christine Lagarde gives opening remarks before the "Challenges of Job-Rich and Inclusive Growth - The Imperative of robust and sustained growth" event.
HubSpot Inc is expected to make its trading debut on Thursday. The company's initial public offering is expected to be priced at $19-$21 per share, valuing the marketing software provider at $637 million at the top end of the range. HubSpot's offering of 5 million shares is expected to raise up to $105 million. Sequoia Capital, Charles River Ventures and General Catalyst Partners are among HubSpot's stockholders. HubSpot helps businesses personalize interactions with customers, who are increasingly averse to traditional marketing tactics such as cold calls, unsolicited emails and disruptive advertisements. The company's shares will trade under the symbol "HUBS".
MOL Global Inc's initial public offering is expected to be priced at $12.50-$14.50 per share on Thursday, valuing the Malaysian online payment company at $978.8 million at the top end of the range. The IPO of 19.5 million American Depository Shares is expected to raise up to $282.2 million. The company, majority-owned by Malaysian billionaire Vincent Tan, is expanding in Southeast Asia and plans to tap the Malaysian government's push to drive e-payments in preparation for a new consumption tax that kicks in next year.
Dave & Buster's Entertainment Inc's initial public offering is expected to be priced at $16-$18 per share on Friday, valuing the restaurant and arcade chain at $703.6 million at the top end of the range. Dave & Buster's is expected to raise $105.9 million from the offering of 5.9 million shares. The company offers sports-oriented entertainment as well as video and simulation games along with food and beverages at 69 venues it owns and operates. Poor market conditions led Dave & Buster's to abort plans to go public in 2012.
An industry advisory committee chaired by the Commodity Futures Trading Commission will talk on Thursday about the agency's jurisdiction in derivative contracts referencing bitcoin. Recently, the agency approved its first bitcoin swap for the Tera Exchange trading platform. The second issue on the agenda is non-deliverable forwards. This is the next type of swap that the CFTC is looking to designate for clearing, which would subject the market to much tighter rule. The meeting will be chaired by Mark Wetjen, the CFTC Commissioner who heads the Global Markets Advisory Committee.
Canada will get its employment report for September next Friday, a week after the U.S. one is released. Hiring is expected to pick up by 20,000 jobs, more than recovering from the previous month's loss of 11,000 positions, but the report has come under scrutiny of late for its swings in both directions. The unemployment rate is forecast to hold steady at 7 percent. Investors will also take in a handful of reports on the housing sector next week, with building permits expected to drop in August after hitting a record high the month before, while housing starts and the new home price index are both seen edging up.
Brazilians go to the polls on Sunday to elect a new president in a race closely watched by investors wary of slow growth and state interference in Latin America's largest economy under leftist President Dilma Rousseff. Polls suggest the election is likely to go to a second-round runoff on Oct. 26 between frontrunner Rousseff and environmentalist Marina Silva, who was thrust into the race in mid-August after her party's original candidate, Eduardo Campos, was killed in a plane crash. An opposition victory would put an end to 12 years of Workers' Party rule. Brazil's September inflation rate will be released on Wednesday by statistics agency IBGE. The annual inflation rate probably drifted away from the government's target ceiling in September, leaving little room for any government measures to pull the economy out of a recession. Stubbornly high inflation is one of Brazil's biggest economic problems. It has eroded business and consumer confidence, held back investments and prompted the central bank to lift interest rates earlier this year to 11 percent, a more than two-year high. On the same day, Chile is scheduled to report September inflation data. Readings in recent months have been consistently higher than forecast and above the central bank target range.
Brazil will host its Economic Conference on Friday. Sandwiched between the first and second round of the country's presidential elections, the conference will discuss Brazil as a market for foreign investment. The country has suffered from mounting inflation and a weakened currency in recent months. Many traders see Brazil's risk premium declining under a different administration, which would help attract foreign investment and support the real. The meeting will include speeches by Brazil's foreign minister, the ambassador of Brazil to the United States and the president of the Brazilian Development Bank.
Mexican consumer price data for September on Thursday will show if inflation is continuing to rise above the central bank's 4 percent limit or if it has begun to cool after a recent spike in fresh food prices. Industrial output data for August on Friday will show if factory and construction sectors are picking up after a sluggish start to the year.
Peru's central bank decides on Friday whether to hold the interest rate at 3.5 percent amid weak growth and tame inflation. The central bank lowered the key rate in September, its third cut over the past year as the economy has slowed to its slowest pace since 2009. The monetary authority then revised down its 2014 growth outlook to 3.5 percent and loosened reserve rules on deposits in the local sol currency - a policy it has used to help stimulate growth.
MONDAY, OCTOBER 6 The Federal Reserve will begin publishing a new monthly index of U.S. labor market conditions that draws on a range of data to give a better sense of the economy's health. The Labor Market Conditions Index, or LCMI, is the second new labor market indicator to be generated by the central bank as it tries to develop a better understanding of wage, job and related dynamics in the current economy.
Federal Reserve Bank of Kansas City President Esther George speaks on the U.S. economy before an economic forum hosted by the Federal Reserve Bank of Kansas City (2030/0030).
In Canada, the seasonally adjusted Ivey Purchasing Managers Index for September, which cooled to 50.9 in August from 54.1 in July, is scheduled for release. (Reporting By Nikhil Kumar; Editing by Simon Jennings)