What to Watch in the Day Ahead - Wednesday, July 29
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On the second day of the Federal Open Market Committee meeting, the committee will release a policy statement on its interest rate decision. (1400/1800) The National Association of Realtors is scheduled to release its Pending Home Sales Index for June. The index is likely to show a slight increase of 1.0 percent from its 0.9 raise in May. (1000/1400) The Mortgage Bankers Association releases its seasonally adjusted index of mortgage application activity. (0700/1100)
Online social networking service Facebook Inc is expected to grow revenue, excluding the impact of a strong dollar, according to Wall Street analysts. The company has been ramping up spending as it steps up efforts to expand a collection of products that include messaging service WhatsApp, photo-sharing service Instagram and virtual reality headset maker Oculus Rift. Analysts expect the company's ongoing traction with various segments of advertisers to help Facebook capturing a growing share of digital advertising budgets. Investors will keep a close watch on costs and whether the company can keep up growth in monthly active users, when it reports its second-quarter results.
Mastercard Inc is expected to announce second-quarter results in line with analysts' expectations, according to Thomson Reuters StarMine. A strong dollar is expected to hurt the world's No.2 debit and credit card company, which gets 60 percent of its payment volumes from outside the United States. About 10 percent of transactions made using the company's plastic are on gasoline, according to analysts, and the low oil prices remain a drag on Mastercard's earnings. Arch rival Visa is in talks to buy Visa Europe, which could mean a more powerful threat in Europe, where Mastercard has a strong presence.
MetLife Inc, the largest life insurer in the United States is expected to report a rise in second-quarter profit, helped by gains from investments and derivatives. MetLife, which has long relied on its substantial derivatives program to smooth out risks from changes to interest rates, currency exchange rates and equities, may also launch another share buyback on top of its $1 billion repurchase in the first quarter. Shares will be sensitive to comments on the U.S. Fed raising interest rates later this year as the company set aside billions of dollars in reserves when interest rates were at their lowest, putting them in an excellent position to release some of these when rates rise.
Health Insurer Anthem Inc, which agreed to buy smaller rival Cigna Corp on Friday, announces second-quarter earnings. It is expected to report a higher profit, but all ears will be on two things: any signs that medical costs are a problem and any further commentary on its $54-billion deal for Cigna. Also, Humana Inc, which has recently agreed to be bought by Aetna, announces its second-quarter earnings. The company warned of its weaker outlook for 2015 already, due to higher medical costs in Medicare Advantage customers, and analysts have lowered their expectations for the quarter.
Microsoft Corp, the world's largest software company, releases Windows 10, the latest version of its venerable operating system, which is fighting for relevance in a new mobile-computing world dominated by Apple and Google. Windows 10 will be launched in 13 global cities.
Whole Food Market Inc, a retailer of natural and organic foods, announces third-quarter results. Whole Foods, which has suffered a same-store sales cool down at the hands of rivals ranging from convenience stores to discounter Wal-Mart, is cutting prices, increasing sourcing disclosures and planning to launch a new lower-priced chain for young shoppers.
Pipeline company Williams Companies Inc, which is in the middle of a takeover battle with Energy Transfer Equity LP, is expected to report a higher profit for the second quarter. The focus will be on Energy Transfer's offer. Energy Transfer said this month it would take any steps necessary to acquire Williams, after the company rebuffed the offer and said it was exploring strategic options. Williams in May said it would scrap its master limited partnership structure by buying its Williams Partners LP, but Energy Transfer wants to scuttle the deal. Continued...