What to Watch in the Day Ahead - Thursday, Nov. 20

Wed Nov 19, 2014 2:24pm 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) Apparel retailer Gap Inc reports third-quarter results. The company estimated revenue below analysts' expectations, citing weak October sales at its Gap and Banana Republic brands. Analysts expect the company to have a good holiday quarter given the clearance of fall merchandise from stores and stocking of better, more colorful products to attract shoppers. Investors will look out for commentary on the holiday season quarter and plans for expansion outside North America. The latest release on U.S. consumer prices 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 lingering angst at the Federal Reserve about the difficulties of getting inflation back up to target. The latest readings from the Labor Department are expected to leave the 12-month change in the core CPI at just 1.7 percent, and the Fed targets 2 percent inflation as gauged by a measure that is running even softer. Separately, the Labor Department issues weekly jobless claims (0830/1330). National Association of Realtors issues Existing Home Sales for October. Existing homes sales are seen holding steady in October, but economists are likely to say a grudging housing recovery is still on the rails. Also, the Conference Board issues Leading Indicators for October (1000/1500). Dollar Tree Inc, whose shareholders are set to vote on its proposed acquisition of Family Dollar Stores in December, is likely to report third-quarter profit above analysts' estimates, according to StarMine. It is expected to have had strong sales in both food and non-food categories, boosted by Halloween shopping. Lower gas prices and improved consumer confidence also indicate a good holiday quarter for the company, most of whose stores are located in low-income neighborhoods. Investors will be looking out for the holiday quarter outlook, comments on the pending acquisition and Dollar General's tender offer for Family Dollar's shares. Consumer electronics retailer Best Buy Co Inc's third-quarter profit is expected to beat estimates, benefiting from the launch of the new iPhones and sales of ultra high-definition 4K televisions. The company, however, warned same-store sales could fall amid stiff competition from online retailers. The company also said higher discounting could erode margins in the second half of the year. Federal Reserve Board Governor Daniel Tarullo speaks on "Liquidity Regulation" before the ClearingHouse Annual Conference Kickoff Breakfast (0745/1245). Separately, Federal Reserve Bank of Cleveland President Loretta Mester speaks on "Forward Guidance and Communications in U.S. Monetary Policy" (1330/1830). Autodesk Inc, a software and services company, is expected to report third-quarter earnings above analysts' average estimate, according to StarMine. The company has been benefiting from strong demand for its computer-aided design software and as more people sign up for its could-based subscription model. Investors will be looking for impact on revenue as multi-year cloud subscription brings in less money upfront but assures a steady stream of revenue. Video game retailer GameStop Corp reports third-quarter earnings. Investors will keep an eye out for any changes to the full-year outlook ahead of the holiday season that has kicked off with highly-anticipated game launches such as Activision's "Call of Duty: Advanced Warfare" and upcoming releases such as Nintendo's upcoming release "Super Smash Bros". A non-jury trial is set to begin in the long-running court battle between Johnson & Johnson and Boston Scientific over the latter's acquisition of Guidant. Johnson & Johnson claims Guidant improperly scuttled J&J's bid by allowing Abbott Labs to examine its books in order to facilitate the merger, which included spinning off a portion of its business to Abbott. J&J is seeking more than $5 billion in damages. The trial is scheduled in two parts, with the second half to take place in mid-December. The case is before U.S. District Judge Richard Sullivan at 40 Foley Square in New York. Intel CEO Brian Krzanich will face scrutiny over Intel's slow progress in mobile when the company holds its annual investor day. The company this year has become the No. 2 supplier of tablet chips by offering customers subsidies leading to billions of dollars of losses in its mobile unit. Krzanich says future tablet chips won't need to be subsidized but Wall Street is skeptical. A top U.S. safety regulator will join auto industry executives to testify at a Senate hearing that will investigate defective automobile air bags linked to deaths and severe injuries. National Highway Traffic Safety Administration Deputy Administrator David Friedman will attend the Senate Commerce Committee hearing looking into the Takata air bag problem. He will be joined by Honda North America Executive Vice President Rick Schostek and Hiroshi Shimizu, Takata Senior VP in charge of global quality assurance. The U.S. government is investigating Takata's air bags, which can explode and hurl metal shards into the vehicle. Splunk Inc, a data analytics software maker, is expected to post third-quarter profit above analysts' average expectations, according to StarMine. In early August, the company cut prices for its cloud software which boosted demand for Splunk Cloud and Splunk apps with Stream and Enterprise Security apps experiencing the highest growth over the quarter, according to analysts. Chipmaker Marvell Technology Group Ltd is expected to report third-quarter profit below estimates, according to StarMine. The company had previously forecast revenue below estimates as demand for its 3G chips continues to dip. Marvell has been investing heavily in 4G LTE chips to offset the weakness it is seeing as more mobile phones move away from 3G. A number of U.S. chipmakers have in recent weeks suggested demand for chips from various industries, including automobiles and network equipment, was falling across regions, particularly Asia and Europe. U.S. Senator Carl Levin's powerful committee will hold a two-day hearing on Wall Street banks' ownership of physical commodities and assets from pipelines to warehouses, touching off a two-year probe into potential market abuses. Wall Street banks - Goldman Sachs, JPMorgan and Morgan Stanley - and regulators will appear before the Permanent Subcommittee on Investigations committee ahead of possible tougher rules from the Federal Reserve. The hearing will likely renew political scrutiny of banks that have faced pressure from the Fed over whether it is appropriate for them to maintain vast holdings in metals warehouses and other physical commodities businesses. Chinese solar panel maker JinkoSolar Holding Co Ltd's third-quarter revenue is expected to jump, helped by higher shipments to and demand from new markets such as the Middle East and Latin America - the company's new focus areas due to higher U.S. tariffs. Investors will want to know about the future of panel prices amid a developing supply glut, and how the tariffs affect the company's profit. Investors will also want to know about any plans to move manufacturing outside China. Shares of the Cnova NV, the e-commerce business of French retailer Casino, are expected to start trading on the Nasdaq. The company's initial public offering comes after an active several months for e-commerce IPOs, culminating in the bumper New York flotation of China's Alibaba in September. Cnova is expected to raise up to $431.5 million, at the $12.50-$14 per share price range. The company, which has nearly $4 billion in annual sales in France, Brazil, Colombia, Thailand, Vietnam and Africa, would be valued at about $6.2 billion at the top end of the range. Habit Restaurants Inc's initial public offering is expected to raise $80 million, valuing the fast-food restaurant chain at about $400 million. The California-based company has 98 restaurants in four U.S. states and its shareholders include private investment firm KarpReilly LLC. The company will join the list of casual dining chains, including El Pollo Loco Holdings and Zoe's Kitchen, that have listed this year. Statistics Canada releases wholesale trade data for September. Analysts predict the sales to edge up 0.8 percent from 0.2 percent in August (0830/1330). (Compiled by Sourav Bose in Bangalore; Editing by Savio D'Souza)