What to Watch in the Week Ahead and on Monday, June 22
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Markets head into a quieter week in terms of data, so the biggest focus is likely to be the back and forth in the Greek debt crisis. Emergency weekend meetings might resolve the situation, but with some from the ECB warning that Greece may not open its banks on Monday, and also warning that officials won't do anything to counter short-term volatility, the latest round of talks scheduled for Monday could create some potential volatility in markets, most notably transmitted through the euro, which has had substantial ups and downs depending on which rumor about a deal or no deal was out in the stratosphere. The U.S. Commerce Department issues final gross domestic product data for the first quarter and revised corporate profits data on Wednesday. On Tuesday, the department also issues May data for durable goods, which is expected to have decreased 0.5 percent, compared to the 1.0 percent drop in April. On the same day, the Federal Housing Finance Agency issues the house price index for April. On Thursday, the Labor Department releases weekly jobless claims data. Also on the same day, financial firm Markit releases its purchasing managers index for June. The PMI index for the services sector is expected to have slightly increased to 56.8 from 56.2 in May. The University of Michigan's preliminary June reading on the overall index on consumer sentiment is expected to be released on Friday.
Nike Inc reports fourth-quarter results on Thursday. The world's largest footwear maker is expected to report profit and sales above analysts' average estimate, according to Thomson Reuters StarMine data. The beat is expected to be driven by high demand for sports and athletic apparel, basketball footwear, and strong sales growth on its website and mobile platforms. A recently-signed merchandising and marketing deal with the NBA and its extensive sponsorship at the 2015 FIFA Women's World Cup are also expected to drive growth in coming quarters. Investors will look for Nike's fiscal 2016 forecast and its comments on its core running assortment, the NBA deal, as well as the overall industry.
Federal Reserve Board Governor Jerome Powell participates in Q&A on economic policy with the Wall Street Journal in Washington on Tuesday. The governor will speak on "Monetary Policy Outlook and the Economy". Separately, Federal Reserve Board Governor Daniel Tarullo participates in a "Conversation on the Economy and Financial Regulation" before the Council on Foreign Relations in New York on Thursday. Federal Reserve Bank of Kansas City President Esther George on Friday speaks on "The Payments System" at the bank's "The Puzzle of Payments Security" conference in Kansas City, Missouri.
General Motors Co will host an event on Tuesday and Wednesday, during which it will introduce two new products, discuss product introductions, Chevrolet growth plans and talk about electrification, tech and R&D plans. Among the executives meeting with the media will be CEO Mary Barra, global product chief Mark Reuss and North American chief Alan Batey on Wednesday, and Chevy marketing chief Tim Mahoney on Tuesday. GM will host a conference call for analysts and investors on Thursday, led by Tom Timko, chief accounting officer, about the No. 1 U.S. automaker's financial reporting.
Consulting and outsourcing company Accenture Plc on Thursday reports third-quarter results, which are expected to be slightly above analysts' average estimate, according to Thomson Reuters StarMine data. Accenture has been benefiting from more business from companies looking to cut costs and improve efficiency in a tough economic environment. Investors will, however, look for the negative impact of a strong dollar, after the company in March cut the top end of its full-year earnings forecast range.
Micron Technology Inc reports third-quarter results on Thursday. The chipmaker is expected to report revenue and profit below analysts' average estimate, according to Thomson Reuters StarMine data, primarily weighed down by weaker-than-expected demand from PC makers. Micron had forecast lower revenue for the quarter, saying it was willing to hold inventories longer in the face of waning demand for electronics featuring its technology. Analysts and investors will be keeping a close eye on its fourth-quarter forecast and commentary how it expects DRAM output to fare for the second half of the year.
On Tuesday, Carnival Corp, the world's largest cruise operator, is expected to report second-quarter profit and sales above analysts' average estimate, according to Thomson Reuters StarMine data. The company is expected to be helped by higher bookings and online spending by consumers, particularly in the Caribbean, its largest market. Investors will also be looking for Carnival's third-quarter forecast, when the company usually earns the largest share of annual profit due to peaking demand in the summer. Continued...