What to Watch in the Day Ahead - Wednesday, Nov. 12

Tue Nov 11, 2014 3:25pm EST
 
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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) Cisco Systems Inc is slated to report first-quarter earnings after the bell. The network equipment maker has been slashing jobs as a new wave of technological innovation known as software-defined networking has crippled its hardware business. Investors will be watching for any indication of future cuts, stabilization in global demand and indications CEO John Chambers may be retiring. Federal Reserve Bank of Philadelphia President Charles Plosser speaks on the economic outlook before the UBS European Conference in London (0300/0800). Federal Reserve Bank of Minneapolis President Narayana Kocherlakota speaks on "Clarifying the Objectives of Monetary Policy" before the Eau Claire Chamber of Commerce (1330 /1830). Department store operator Macy's Inc will report third-quarter results before the bell. The company in August kept its full-year profit forecast but cut its same-store sales forecast, hurt by disappointing sales in the first half of the year due to muted consumer spending. The company has remodeled many stores, including its flagship Herald Square store in Manhattan, and is hiring about 86,000 workers for the busy holiday shopping season. Investors will look out for any commentary on holiday season plans and if the company will change its profit or sales forecast due to the challenging retail environment. Also reporting third-quarter results is retailer J.C. Penney Co Inc, which is likely to report a net loss as it struggles with tough price competition and an uncertain outlook for department stores. Data storage equipment maker NetApp Inc is expected to report second-quarter revenue and profit above the analysts' average estimate, according to Thomson Reuters StarMine. The company's quarterly profit is expected to receive a boost as its enterprise customers spend more to replace their ageing storage equipment. Encana Corp, Canada's largest natural gas producer, will announce third-quarter earnings. Chief Executive Doug Suttles has been working to transform the company into a major oil producer by concentrating spending in regions rich in gas liquids and oil, and selling off natural gas assets. Investors will be on the look-out for any further property sales or acquisitions. Bank of America hosts its annual financial services conference in New York, with Chief Executive Brian Moynihan giving a keynote presentation in the morning. Other notable executives speaking in the day include Goldman Sachs Chief Financial Officer Harvey Schwartz, Morgan Stanley's president of institutional securities, Colm Kelleher, and the CEO of JPMorgan's commercial bank, Douglas Petno. Rockwell Automation, which makes systems that help factories run smoothly, is expected to report a higher fourth-quarter profit, helped by an increase in industrial production in the United States. However, a strong dollar is likely to impact its profit in international markets, which accounts for half of its revenue. Investors will look for an update on the outlook for 2015, as its largest control products business, which has significant exposure to mining in China, Brazil and Canada, is expected to grow at a slower pace due to a decrease in spending by miners. Fertilizer producers CF Industries Holdings Inc and Agrium Inc speak at a Morgan Stanley investor conference in Boston. Of interest are CF's thoughts on M&A following its failed merger talks with Yara, and Agrium's views on timing of a 2015 Canpotex potash supply contract with China. 3D printer maker Exone Co is expected to report third-quarter revenue below analysts' average estimate, according to Thomson Reuters StarMine. The company, which has never posted a profit since going public in February 2013, has been spending heavily on developing its technologies. Investors will look for plans to cut costs, and for guidance on profitability as 3D printer shipments are expected to more than double every year between 2015 and 2018, according to market research firm Gartner. Canadian Solar Inc's third-quarter profit is expected to more than double as its focus on the more-lucrative business of building power plants pays off. Canadian Solar, like other companies manufacturing in China, faces U.S. tariffs on solar products made in the Asian country. The company, in response, is looking to move some of its production "overseas". Investors will want to know more about these new plants, and how they will affect the company's profitability. Plug Power Inc's third-quarter revenue is expected to jump more than four-fold, boosted by rising demand from customers such as Wal-Mart Stores, which uses its hydrogen fuel-cells systems to power forklifts. Rising demand for fuel cells used in telecom networks and power backup systems is also expected to help the company narrow its loss. Plug Power, which has reaped the increasing investor interest in cleaner technology, has been increasing its investments and expanding its clientele in European auto-manufacturing markets as well. Investors will want to know about the company's gross margins, free cash flow status and its order backlog. Shares of Carlyle-owned Axalta Coating Systems Ltd, an anti-corrosion coatings maker, are expected to start trading on the NYSE. The IPO is expected to be priced at $18-$21 and raise up to $945 million. The company is expected to be valued at about $4.8 billion at the upper end of the range. Canada's Finance Minister Joe Oliver will present the government's Fall Economic and Fiscal Update, which brings up to date the forecasts for the budget and the economy that were presented in the February budget. It will reflect a package of family tax cuts and benefits announced on Oct. 30, which will cost C$3.07 billion for 2014-15 and C$4.62 billion for 2015-16. The February budget had projected a C$2.9 billion deficit for 2014-15 and a C$6.4 billion surplus for 2015-16. If there is little surplus left for 2015-16, it could force the opposition parties campaigning in the October 2015 election either to revoke some of the family tax cuts and benefits or to live with relatively little fiscal room for their own initiatives (1225/1725). Bank of Canada Deputy Governor Lawrence Schembri will give a presentation entitled "Promoting Canada's Economic and Fiscal Well-Being" to the Greater Summerside Chamber of Commerce in Prince Edward Island, as part of the bank's regional outreach program (1125/1625). Canada's Teranet-National Bank Composite House Price Index for October is scheduled for release. The index measures price changes for repeat sales of single-family homes and showed national home prices rose 0.3 percent in September. (Compiled by Ayesha Sruti Ahmed in Bangalore; Editing by Savio D'Souza)