What to Watch in the Week Ahead and on Monday, Nov. 17
(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 Minutes from the Federal Reserve's most recent meeting, to be released on Wednesday, should yield clues on how policymakers are squaring a run of weak inflation readings with an improving labor market, and the state of debate around when and how to start the Fed's first rate hike cycle in a decade. Minneapolis Fed chief Narayana Kocherlakota, a policy dove who wants to defer rate hikes until 2016, and San Francisco Fed President John Williams, a centrist who supports a mid-2015 rate hike, are among top Fed officials speaking next week. The end of earnings season has left the market without much of a catalyst and the lack of volatility and overall thin trading shows how investors are starting to pare back on activity. Reuters will welcome numerous hedge funds managers and institutional portfolio managers at the annual Investment Summit that has moved markets and stocks before. In addition, housing and inflation figures may push the bond market one way or another, though recent trends would suggest the lack of pricing power remains and should keep a lid on long-dated yields. The latest release on U.S. consumer prices on Thursday is likely to garner more than the usual interest, given lingering concerns at the Federal Reserve about low inflation. Falling gasoline prices are seen dragging the CPI down by 0.1 percent in October, while a core gauge is expected to edge up just 0.1 percent, which would do little to ease the Fed's angst. A reading on producer prices on Tuesday is also likely to be soft. Other data should show the economy largely humming, with a reading on October factory output on Monday expected to move up 0.4 percent and a gauge of November factory activity on Thursday also rising. Readings on new and previously owned home sales should indicate the tepid housing recovery also remains on track. Retail companies reporting third-quarter results in the week include office supplies retailer Staples Inc on Wednesday; and apparel retailer Gap Inc, consumer electronics retailer Best Buy Co Inc and dollar-store operator Dollar Tree Inc on Thursday. Staples' profit is expected to miss estimates, hurt by lower sales of computers and core office products in North America amid stiff competition from online and mass retailers. Profits at Best Buy and Dollar Tree are expected to beat estimates. Of interest will be holiday-season quarter forecasts for all the companies. Medtronic Inc, the world's largest standalone medical device maker, is expected to report higher second-quarter earnings on Tuesday, but investors will be more interested in comments on its planned $43-billion acquisition of Dublin-based hospital products maker Covidien Plc. Medtronic is forging ahead with the plan, despite new U.S. tax rules aimed at deterring such tax-inversion deals that have forced the company to take on more debt to finance the buy. Software and services company Autodesk Inc is expected to report third-quarter earnings above the average analyst estimate on Thursday, according to Thomson Reuters StarMine. The company is benefiting from strong demand for its computer-aided design software and as more people sign up for its could-based subscription model.
Chipmaker Marvell Technology Group Ltd is expected to report third-quarter profit below estimates on Thursday, according to Thomson Reuters StarMine data. The company has forecast third-quarter revenue below estimates, as demand for its 3G chips continues to fall.
Business software maker Salesforce.com Inc is expected to report third-quarter results above the average analyst estimate on Wednesday, according to Thomson Reuters StarMine. The company raised its full-year profit and revenue forecast in August due to higher sales of its web-based sales and marketing software. Spending on enterprise resource management and customer relationship management has been strong and analysts expect that to grow rapidly in the near term. Investors will look for comments on its investment plans in healthcare. Data analytics software maker Splunk Inc is expected to post third-quarter profit above analysts' average estimate on Thursday. Demand has been robust for Splunk Cloud and Splunk apps after the company lowered pricing for its cloud software in early August, according to analysts, with Stream and Enterprise Security apps experiencing the highest growth over the quarter.
AstraZeneca holds its investor day on Tuesday. The event comes eight days before Pfizer Inc is allowed to launch a new public bid under UK takeover rules. AstraZeneca is expected to use the opportunity to demonstrate its standalone strengths by focusing on developments in its new drug pipeline, especially in fighting cancer. Chinese solar panel maker JA Solar Holdings Co Ltd is expected to report a third-quarter profit, compared to a year-earlier loss, on Tuesday, helped by strong demand from new markets such as the Middle East, Africa and Latin America and quarterly revenue is expected to rise. Investors will look for comments on plans to set up factories in North America to bypass U.S. duties on solar panels made in China.
On Thursday, JinkoSolar Holding Co Ltd is expected to report a jump in third-quarter revenue. Investors will want to know about the future of panel prices amid a developing supply glut, and how the U.S. tariffs are affecting the company's profits. They will also want to know about any plans to move manufacturing outside of China. Trading debuts this week include Store Capital Corp on Tuesday; Paramount Group Inc on Wednesday; and Cnova NV, Habit Restaurants and Adama Agricultural Solutions Ltd on Thursday. Store Capital's offering is expected to raise $522.5 million, valuing the company at $2 billion. Real estate company Paramount Group's offering is expected to raise up to $2.5 billion, valuing it at $4.6 billion at the top end of the $16-$19 per share range. Cnova, the e-commerce business of French retailer Casino, is expected to raise up to $431.5 million at the $12.50-$14 per share price range, valuing it at $6.2 billion at the top end. Fast-food restaurant chain Habit Restaurants is expected to raise $80 million, valuing the company at about $400 million. Crop protection chemicals provider Adama is expected to raise about $423 million at the top end of its expected price range, valuing the company at about $2.91 billion at the top end.
Investors will have to wait until Friday for Canada's main economic release of the week - the October's inflation report. The annualized inflation rate is expected to hold steady at 2 percent, in line with the Bank of Canada's target, while the less-volatile core rate is forecast to edge up to 2.2 percent. Markets will be watching the report for what it might mean for Bank of Canada's policy, though the report is unlikely to change policymakers' cautious stance. The central bank has said the recent firming in inflation is largely due to temporary factors. Investors will also get a report on wholesale trade on Thursday, which is likely to show an increase of 0.6 percent in September. MONDAY, NOVEMBER 17 Meat processor Tyson Foods Inc is expected to report fourth-quarter profit and revenue above the average analyst estimate, according to Thomson Reuters Starmine. Strong momentum in chicken business, along with positive pricing in pork and beef, is likely to aid top-line growth. However, increasing input prices, particularly due to higher cost of beef, are likely to hurt. JD.com Inc, China's No. 2 e-commerce firm and Alibaba's biggest challenger, announces its third-quarter results. JD.com has a tough act to follow, with Alibaba's merchandise volume growing around 50 percent year-on-year. Attempts to keep pace with China's e-commerce titan could also be coming at a large cost as JD.com pours money into logistics, merchandise stocks and warehousing to try and maintain a competitive edge. Alibaba has also demonstrated success in getting customers to shop on mobile, a feat JD.com will have to match if it wants to impress investors. Statistics Canada announces September data on Canadian securities. Foreigners bought C$10.28 billion of Canadian securities in August, the largest amount since May, while Canadians made net investments of mere C$33 million in foreign securities in the same period. (Compiled by Ayesha Sruti Ahmed in Bangalore; Editing by Sriraj Kalluvila)
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