What to Watch in the Day Ahead - Tuesday, July 28

Mon Jul 27, 2015 2:52pm EDT
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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 Federal Open Market Committee begins a two-day meeting on interest rate policy. Separately, the Conference Board releases its index of U.S. consumer attitudes. The index is expected to have fallen to 100.0 in July from 101.4 in June. (1000/1400) In another report, the S&P/Case Shiller composite index of 20 metropolitan areas is expected to have risen at an annual rate of 5.6 percent in May. (0900/1300) Also, financial firm Markit releases its preliminary reading of its Purchasing Managers Index (PMI) for July. PMI for the services sector is expected to have increased to 55.0 from 54.8 in June. (0900/1300) The Federal Reserve Bank of Richmond will issue Manufacturing and Services indices for July. (1000/1400) Drugmaker Pfizer Inc, which gets nearly two-thirds of its revenue from markets outside the United States, is expected to report lower earnings for the second quarter, hurt by a stronger dollar. However, expected higher sales of its new breast cancer drug, Ibrance, and growing use of its Prevnar pneumococcal vaccine in adults will help prop up results.

Merck & Co, the No. 2 U.S. drugmaker, is expected to report lower sales for the second quarter, mainly due to a stronger dollar and divestiture of its consumer care business. However, sales of the company's new Keytruda immuno-oncology drug are expected to help boost its results and will be a main focus of investors.

Gilead Sciences Inc, the maker of expensive hepatitis C drugs Sovaldi and Harvoni, will report second-quarter results. Investors are keen to see the number of patients taking its hepatitis C drugs, after rival AbbVie said earlier this month than its U.S. sales were declining. Gilead has said it is open to considering merger and acquisition prospects. Investors will look for any comments regarding acquisitions.

United Parcel Service Inc, the world's largest package delivery company, will report second-quarter results. Analysts will be watching for the company's plans to introduce surcharges for residential packages in the upcoming holiday season, plus for insights into how its higher-margin international business has been affected by slowing growth in China and a moribund global economy.

Dow component DuPont Co is expected to report a lower second-quarter profit, hurt by a fall in agriculture earnings and a stronger dollar. The company defeated in May a campaign by Trian to land seats on DuPont's board, delivering a landmark setback to one of the most influential activist investor firms. The company has moved its focus to its agri business, but seed sales have been weighed down by a switch to soybean from corn in North America. Corn seed sales account for about half of the sales from DuPont's agricultural products unit, its largest.

Ford Motor Co releases second-quarter results before the market opens. Recently, Ford had said that it was looking to a raft of new sedan and SUV launches in China later this year to regain momentum in the world's largest auto market, after its sales barely grew in the first half of 2015. Investors are keen to know how Ford has weathered the downturn of retail vehicle demand in China.

Oil and gas company BP Plc announces second-quarter results. Investors will focus on the company's plans to grow its portfolio after the $18.7 billion settlement for its deadly 2010 Gulf of Mexico oil spill.

Twitter Inc, which has been struggling with slowing user growth, is expected to report second-quarter revenue below analysts' expectations, according to Thomson Reuters StarMine. Twitter had warned that user growth was off to a slow start in April and that its new direct response ads, intended to encourage actions such as clicking on a link to an advertiser's website, did not generate the revenue expected. Investors will look for commentary on the progress in direct response ads. They will also await updates on the company's ongoing search for a new chief executive and the impact of a strong dollar. Last month, CEO Dick Costolo abruptly announced that he was stepping down and that co-founder Jack Dorsey would take over as interim-CEO.

The United States will host a meeting of trade ministers from a proposed Asia-Pacific trade bloc. Ministers from the 12-nation Trans-Pacific Partnership, or TPP, will meet in Maui, United States from July 28 to 31.   Continued...