What to Watch in the Day Ahead - Wednesday, Oct. 22

Tue Oct 21, 2014 2:47pm EDT
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(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) Wireless carrier AT&T Inc reports third-quarter earnings. The company has faced growing competition from smaller carriers and has lowered prices and launched aggressive promotions. Investors will look for details on future price cuts, the company's strategy for the wireless spectrum auctions as well as the number of customers signing up for its equipment financing plan, which unbundles the cost of devices from the cost of service. Analysts estimate the company will bring in 800,000 postpaid subscribers and $33 billion in revenue, boosted by sales of the iPhone 6. Record delivery of new aircraft and continued cost cutting are expected to produce another quarter of strong results at Boeing Co when the world's biggest planemaker reports third-quarter results before the bell. Analysts and investors are watching for signs of trouble in sustaining production rates, and for details on how Boeing will deploy the billions in cash that it is generating. General Motors Co reports third-quarter earnings. Investors will watch for progress of European recovery and the Opel brand, whether Latin America will continue to weigh on its earnings and how the recall of vehicles with ignition-switch problems may hurt the Detroit-based company's bottom line. Dow Chemical Co is expected to report a higher third-quarter profit, helped by robust sales of farm products. Investors will be looking for details of a new herbicide that received a final approval from the U.S. Environmental Protection Agency last week. The approval paves the way for the commercialization of the herbicide, Enlist Duo, which will be sold along with Enlist corn and soybean seeds. Commercialization of the Enlist products, expected next year, will substantially boost Dow's market share in the agriculture business, analysts say. Investors will also be looking for updates on the company' $6 billion asset sale program. The U.S. Labor Department issues Consumer Price Index and real earnings data for September. Analysts polled by Reuters expect the index to stay unchanged in September. Last month, the data showed the Consumer Price Index declined 0.2 percent in August (0830/1230). The U.S. Securities and Exchange Commission and the Federal Reserve in separate meetings are expected to adopt the 'risk retention' rule, a day after the FDIC did the same. The rule will require banks to keep part of the risk on their books when they sell mortgages or other loans to investors. Such sales, called securitization, were at the heart of the credit crisis because banks eased the standards for loans, knowing they were going to sell them on anyway. The SEC meeting is at 1000/1400 and the Fed meets at 1530/1930. GlaxoSmithKline Plc reports third-quarter earnings. Investors will focus on flagging sales of lung drug Advair and efforts to regain sales momentum after several quarters of disappointing growth, particularly in the United States. They will also be looking for comment on whether dividend can still be raised, the possibility of further fallout from a China corruption scandal and any news on its experimental Ebola vaccine which is now in early clinical trials. Abbott Laboratories is expected to report moderately higher third-quarter earnings, fueled by a recovery in Asian sales of its infant formula brands, which were recalled last year due to contamination concerns. The company may provide details about its plans to sell its generics business in developed markets outside the United States to Mylan Inc. Boston Scientific Corp, the medical equipment maker that has struggled to produce steady earnings, is expected to double its third-quarter profit when it reports results before the market opens. A negative review by an FDA advisory committee could overshadow the earnings as investors listen for the company's next steps on its new watchman device to reduce stroke. Biogen Idec Inc is expected to report much higher third-quarter revenue and profit as sales of its new oral multiple sclerosis drug, Tecfidera, soar while older MS treatments continue to contribute to the bottom line. Investors will look for updates on the launch of Biogen's new hemophilia drugs and on its pipeline of medicines in development. Ingersoll-Rand Plc, the maker of heating, ventilation and air conditioning equipment, is expected to report better-than-expected third-quarter results as sales of its Thermo King truck refrigeration units are expected to increase. Investors will be looking for information on how the residential HVAC business performed in the quarter and outlook for the next quarter. Xerox Inc is expected to report a smaller-than-expected third-quarter profit, according to StarMine data. The company, which has a strong presence in the Asia-Pacific region, has been experiencing lower demand in its printing business and analysts don't expect the situation to improve in the near term. Advertising agency Interpublic Group of Companies Inc is expected to report third-quarter revenue in line with analysts' expectations, according to Thomson Reuters StarMine. Investors will look for comments on recent speculation about a sale of the company after activist hedge fund Elliot Management disclosed a 6.7 percent stake in the company. Data storage products maker EMC Corp is expected to report a better-than-expected profit for the third quarter, according to StarMine data, and is expected to benefit from flash storage products sales. The company, whose merger talks with Hewlett-Packard fell through recently, was also urged by activist investor Elliott to spin off its VMware virtualization software unit earlier this month. Online review website Yelp Inc is expected to report third-quarter results above analysts' expectations, according to StarMine. Yelp has devised advertising deals to lure more business to its site and launched new features to draw more users. Analysts speculate that the company's cost-per-click advertising model will help boost revenue during the quarter. Video conferencing equipment maker Polycom Inc is expected to report third-quarter results largely in line with analysts' expectations, according to StarMine. Polycom has been cutting costs aimed at operating margin improvement that will help it better compete against larger rivals such as Cisco and Google. Canadian company OpenText Corp, which makes software that helps companies manage documents and workflows, is expected to report a higher quarterly profit, driven by a jump in license revenue. Investors will look for any commentary on the impact of the strengthening U.S. dollar on the company's profits going forward. ServiceNow Inc, which makes software to automate and manage IT services, is expected to beat profit estimates during the third quarter, according to StarMine. JMP Securities analysts say the company is expected to benefit due to an improved spending environment and that its products are winning market share from rivals such as BMC Software. Investors will look for commentary on the fourth quarter and 2015 outlook. Fortinet Inc's third-quarter profit is expected to beat analysts' estimates, according to StarMine. Analysts say the company is benefiting from stronger demand for its high-end products, particularly in Europe, as the frequency and sophistication of cyber-attacks increase. Angie's List Inc, which operates a website that allows users to review local businesses, is expected to post a smaller-than-expected third-quarter loss, according to StarMine. The company, which is yet to post a profit, is expected to benefit from revenue from advertising contracts and fees from e-commerce transactions. The Bank of Canada releases its rate decision and updates it economic outlook via its quarterly Monetary Policy Report. Analysts expect the bank will likely stick to its cautious stance and the statement will be parsed for any insight into the outlook for the global economy or concerns about the recent volatility in financial markets (1000/1400). Bank of Canada Governor Stephen Poloz and Senior Deputy Governor Carolyn Wilkins will testify before the House of Commons finance committee. Also, Governor Poloz will give a news conference following the release of the report. Separately, Statistics Canada releases retail sales data for August (0830/1230). Mexico's retail sales data will show how consumer spending fared in August after rising in July and wobbling this year thanks to a tax hike (0900/1300). Separately, the Argentine government is due to release September trade balance data (1500/1900). (Compiled by Ayesha Sruti Ahmed in Bangalore; Editing by Maju Samuel)