July 28, 2015 / 6:53 PM / in 2 years

What to Watch in the Day Ahead - Wednesday, July 29

(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)

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.

Biotechnology company Vertex Pharmaceuticals Inc is expected to report lower-than-expected second-quarter earnings, according to Thomson Reuters StarMine. Vertex was the first to develop a drug to treat the underlying cause of a rare lung scarring disorder called cystic fibrosis (CF). Investors will be looking to see how well the company is faring following the approval of Vertex’s latest CF drug, which allows the drugmaker to address a population of 8,500 patients, up from 2,000.

Hilton Worldwide Holdings Inc, the owner of Waldorf Astoria and Conrad brands of hotels, is expected to report second-quarter revenue above analysts’ estimates, according to Thomson Reuters StarMine. With hotel occupancy in the United States reaching record heights, analysts expect a spike in average room rates, boosting revenues. Investors will be interested to see if the stronger dollar will impact the company’s leased business, most of which is outside the U.S.

Rockwell Automation Inc, which makes automation systems that help factories run smoothly, is expected to post a higher profit for the third quarter, helped by lower costs. However, revenue is expected to decline, hurt by a strong dollar. Rockwell gets nearly half of its annual sales from outside the United States. Investors will look for an update on full year financial forecast.

General Dynamics Corp, a maker of U.S. submarines, ships and business jets, is expected to report higher earnings and revenues for the second quarter.

U.S. weapons maker Northrop Grumman Crop is expected to report lower second-quarter earnings and revenue, reflecting a drop in U.S. defense spending. Thomson Reuters Corp reports second-quarter earnings, with analysts keen to see whether the company’s division that caters to banks and other financial institutions will repeat the stable results from the prior quarter. The news and information company is expected to post earnings, excluding items, of 50 cents per share on revenue of $3.07 billion.

Goodyear Tire & Rubber Co, the largest U.S. tiremaker, has been cutting costs to shrug off effects of a 9 percent rise in the dollar in the first three months of the year that reduced revenue at almost all U.S. companies with international exposure. Investors will be looking for updates on how the currency is expected to impact results in the rest of the year, given that the dollar fell 3 percent in the three months ended June.

Western Digital Corp, the world’s No. 1 hard-disk drive maker, is expected to report a fourth-quarter profit below estimates, according to Thomson Reuters StarMine, as the company has been facing slower growth in its cloud business, and lower demand from its enterprise customers. PC sales have also been slipping, leading to a fall in demand for the company’s hard-disk drives.

Spirit Aerosystems Holdings Inc, the maker of fuselages for Boeing and Airbus, is expected to benefit from rising demand for fuel-efficient aircraft and commercial planes. Investors will look for comments from Spirit Aero on Boeing’s deferred costs on its 787 program. Spirit, which receives over half of its revenue from Boeing, has been helped by higher orders from the company.

Nomura Holdings Inc announces its first-quarter results, with the focus on the performance of its overseas fixed income operations given the tough trading conditions in the eurozone caused by the Greek debt crisis.

Online photo-sharing company Shutterfly Inc is expected to post a second-quarter profit slightly above the average analyst estimate, according to Thomson Reuters StarMine. Shutterfly is expected to benefit from a jump in the number of customers using its service. Activist investor Marathon Partners has been pressuring the company to change its board composition, and investors will look for any update on the matter. Investors will also look forward to management commentary on outlook for the remainder of 2015.

Business software maker Open Text Corp is expected to announce a lower profit in the fourth quarter. The company said in May it anticipates a negative impact from a strong dollar in the quarter. Analysts also expect the company’s revenue to be hurt as more customers move to the cloud business. Open Text cut its workforce by 5 percent in May, when CEO Mark Barrenechea resumed involvement in the company’s daily operations.

Canadian gold miner Kinross Gold Corp is expected to report a second-quarter loss on the back of weaker metals prices. Kinross will likely face questions on how it plans to boost its production, which will decline by about half by 2020 without an acquisition or organic growth. At current gold prices some of its mines have costs above the gold price, leading to questions about whether it might put some operations on care and maintenance.

USA Today publisher Gannett Co Inc is expected to report third-quarter revenue, its first results after the spin-off of Tegna, in line with analysts’ estimates, according to Thomson Reuters StarMine. Recently, Tegna reported revenue and profit well above analysts’ estimates. Analysts are looking for guidance for the new company and new investments it plans to make.

Oil and gas producer Penn Virginia Corp is expected to report a bigger second-quarter loss, hurt by lower crude oil prices. Lone Star Value Management LLC, which owns a 1.67 percent stake in the Penn Virginia, asked the company to explore “all credible proposals”, after media reports emerged of a takeover offer from oil giant BP Plc. Penn Virginia has refuted the takeover rumors. The company’s second-biggest shareholder, investment firm Soros Fund Management LLC, had suggested last year that Penn Virginia sell itself to maximize shareholder value.

LIVECHAT - Outlook for rates and stocks with Solaris CIO Tim Ghriskey U.S. corporate reporting season has hardly been spectacular, and with rates headed higher at some point, investors may start looking to take cover. Tim Ghriskey, chief investment officer at Solaris Asset Management, joins the Forum to talk about which markets are looking strongest against these potential headwinds. (1000/1400) Also, join Carsten Brzeski, chief economist, Germany, ING to discuss the wider implications of a possible first policy tightening in the world's largest economy in a generation. (0500/0900) To join the Global Markets Forum, click here bit.ly/1kTxdKD

General Motors Co is expected to reveal investment and product launch plans for India, following up on its decision to invest $5 billion to build cars for emerging markets. Stefan Jacoby, head of international markets for GM, will participate.

Boeing Co Chairman Jim McNerney is scheduled to speak at Washington event. McNerney will discuss the fight over reauthorization of the Export-Import Bank, the company’s recent charge for the new U.S. Air Force tanker and other issues at the Washington Economic Club. (Compiled by Nivedita Balu; Edited by Maju Samuel)

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