What to Watch in the Day Ahead - Tuesday, Dec. 23

Mon Dec 22, 2014 3:10pm 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. All estimates for economic data are according to Reuters polls.) The Commerce Department will release its third and final estimate on growth in gross domestic product in the third quarter. The department is expected to raise its estimate to 4.3 percent from 3.9 percent (0830/1330). The department will also release data on durable goods orders, which is expected to show a rise of 2.9 percent in November compared with a 0.3 percent gain in October (0830/1330). Core capital goods orders are expected to have increased 1.5 percent in November after falling 1.6 percent in October. Consumer spending and income are expected to have risen by 0.5 percent each in November after advancing 0.2 percent in October (1000/1500). New home sales are forecast to rise to 460,000 units in November from 458,000 units (1000/1500). The Federal Housing Finance Agency releases its House Price Index for October, which is coming off a 4.3 percent year-on-year increase in September (0900/1400). Also releasing in the day is the Thomson Reuters/ University of Michigan Consumer Sentiment Index which is expected to ease to 93.5 in the late-December assessment, compared to 93.8 in the month's preliminary reading (0955/1455). Separately, the Philadelphia Fed releases its survey of non-manufacturing activity for December (1000/1500) and the Richmond Fed releases its indices of manufacturing activity and services revenues for December (1000/1500). Walgreens, the largest U.S. drugstore chain, will report its first-quarter earnings. The company reported last month a 5.8 percent jump in comparable store sales, helped by higher number of prescriptions filled and a rise in pharmacy sales. Gross margins are expected to remain under pressure and investors will watch out for comments on reimbursement pressure, generic drug inflation and significant step-downs from Med D reimbursement rates, which are likely to impact earnings in the short term.

Family Dollar's shareholders are scheduled to vote on the company's deal with Dollar Tree. Family Dollar could delay the shareholder vote on the potential acquisition, CNBC said last week, citing sources. The company is expected to start the shareholder meeting and then adjourn it, CNBC said. Family Dollar has agreed to be acquired by Dollar Tree for $8.5 billion in cash and stock after twice rejecting higher all-cash bids from bigger rival Dollar General, citing antitrust concerns. Statistics Canada will release gross domestic product data for October. Gross domestic product is expected to have grown 0.1 percent, slower than the 0.4 percent pace seen in September (0830/1330). Brazil's central bank will release its quarterly inflation report, with its economic growth and inflation estimates for the next couple of years. The bank will likely cut its gross domestic product growth estimate in line with the more moderate estimates released recently by the administration's new economic team. Its inflation forecasts will also signal whether the bank will keep its aggressive pace of monetary tightening or opt for a smaller rate increase in January. Later in the day, the central bank's Director Carlos Hamilton Araujo will give a press briefing explaining the details of the report. (Compiled by Ayesha Sruti Ahmed in Bengaluru; Editing by Kirti Pandey)