What to Watch in the Day Ahead - Thursday, Jan. 8

Wed Jan 7, 2015 2:44pm 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) The U.S Department of Labor issues its weekly update on new applications for unemployment insurance. Initial jobless claims are expected to have dropped in the latest week to 290,000 from 298,000 the prior week. The drop in claims could signal a firming labor market, although applications can be volatile around the holiday season (0830/1330). Meanwhile, Challenger, Gray & Christmas Inc releases its report on job cuts for December (0730/1230). Separately, the U.S. Federal Reserve issues Consumer Installment Credit data for November (1500/2000). Beverage maker Constellation Brands Inc's third-quarter profit is expected to fall short of Street estimates, according to Thomson Reuters StarMine, hurt by higher expenses related to investments made for the purchase and expansion of the Nava Mexico glass plant and its joint venture with Owens-Illinois. Constellation lowered its free cash flow projection for fiscal 2015 to reflect these initiatives. The company took a $9 million charge on the recall of defective Corona Extra glass bottles in the previous quarter. Investors will be looking out for the company's forecast. Home goods retailer Bed Bath & Beyond Inc's third-quarter profit and sales are expected to have beaten Street estimates, according to Thomson Reuters StarMine, driven by a strong holiday shopping season. The company, which has been focusing on its ecommerce business, is also likely to have benefited from better economic conditions, while last year's accelerated buyback has led to Bed Bath & Beyond being viewed as more shareholder-friendly. Investors will be looking out for its earnings forecast. Federal Reserve Bank of Boston President Eric Rosengren speaks before the Wisconsin Bankers Association's 2015 Wisconsin economic forecast luncheon (1330/1830). Separately, Federal Reserve Bank of Minneapolis President Narayana Kocherlakota participates in a public town hall forum at the Federal Reserve Bank of Minneapolis (2000/0100). Meanwhile, the Federal Reserve Bank of Philadelphia will issue annual historical revisions to its monthly business outlook survey. Family Dollar Stores Inc releases first-quarter results before the bell. In December, the company delayed its shareholder vote on Dollar Tree's offer citing low attendance. Family Dollar agreed to be bought by Dollar Tree for $8.5 billion in cash and stock after twice rejecting higher all-cash bids from bigger rival Dollar General Corp, citing antitrust concerns. Family Dollar has said that the meeting to vote on the Dollar Tree deal will now be held on Jan. 22. Investors will look for updates on how the deal is progressing and whether the antitrust concerns over the Dollar General bid have been addressed. They will also look for commentary on Family Dollar's efforts to expand its merchandise, particularly in the consumables category. Analysts polled by Thomson Reuters StarMine expect the company's profit to beat expectations. Apollo Education Group Inc, the owner of the University of Phoenix, is expected to report first-quarter results below market estimates as enrollment continues to decline. Investors will be looking for commentary on how increased scrutiny from the U.S. Department of Education is likely to impact the company and how it plans to stem the falling enrollments, as well as details on its overseas expansion plans. Cargill Inc, the privately held agribusiness, will release second-quarter results covering a period that saw grain prices slump amid a record U.S. harvest, while crude oil fell to multi-year lows and beef and pork prices hovered near historic highs. The company has said it would benefit from big crops and increased global grain demand due to lower prices, but a soaring greenback has provided a stiff headwind to exports of dollar-denominated grains. Canada's Valeant Pharmaceuticals International Inc will provide its forecast for 2015, following its failed attempt to take over Botox maker Allergan Inc late last year. Of particular interest will be whether Valeant eases up its efforts to become a Top 5 pharma company by the end of 2016, a target that requires it to roughly triple its $46 billion market cap. Some observers expect Valeant to cut down on deal making in the near term and focus on improving operations and slashing debt. Statistics Canada releases November data for new housing prices. Analysts forecast a rise of 0.1 percent in November from October (0830/1330). Brazil's statistics agency releases data on industrial output growth during November. Manufacturers have consistently been the weakest link in Brazil's economy as they struggle with competition from abroad, high tax and labor costs, and poor infrastructure (0600/1100). Separately, automakers will report December output and may issue forecasts for 2015. Brazilian automaker association Anfavea is expected to confirm the biggest drop in annual production since 1998, with a fragile recovery this year underscoring concerns of a wave of layoffs (0730/1230). Mexico's December inflation figures are scheduled for release. Annual consumer prices cooled in November to 4.17 percent, but remained above the central bank's 4 percent tolerance ceiling (0900/1400). Chile's statistics agency issues inflation data for December, which investors will monitor to see if consumer prices continued to subside after cooling the prior month (0600/1100). The Bank of England's Monetary Policy Committee announces its interest-rate decision. The Committee left its bank rate at 0.5 percent (0700/1200). (Compiled by Sourav Bose in Bengaluru; Editing by Simon Jennings)