What to Watch in the Week Ahead and on Monday, August 3
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Next week brings another crush of earnings reports, though as we've turned the corner and are now more than halfway through, the outcome of the season has sort of coalesced in the minds of many - tech, industrials and global-focused companies are having a harder time of it than the financials and healthcare names. Next week brings staples and stalwarts like Disney, expected to keep raking in the bucks just six months before Star Wars starts the entire process over again. But we also have to contend with jobs figures on Friday, as investors ready for the first rate increase from the Fed in nearly a decade.
Media company and theme park operator Walt Disney Co on Tuesday is expected to report third-quarter profit above the average analyst estimate, according to Thomson Reuters StarMine. Disney's quarterly results will include gains from the release of second film in the "Avengers" series - "The Avengers: Age of Ultron". The company is also expected to rake in higher revenue in its park and resorts business unit, helped by the onset of summer break in June. However, Walt Disney's reliance on revenue generated by its cable channels, especially ESPN, remains a concern amid a period of uncertainty in the cable industry.
CVS Health Corp, the second-largest U.S. drugstore operator, is likely to report second-quarter sales above analysts' average estimate, according to Thomson Reuters StarMine. The company, which recently made multi-billion acquisitions of healthcare services firm Omnicare Inc and Target Corp's pharmacies and clinics, reduced its full-year profit forecast to reflect a reduced share buyback target. When it reports on Tuesday, investors will look for updates on retail sales growth, which have taken a hit since the company stopped selling tobacco products last year, and integration of its acquisitions.
Friday's jobs data is expected to show the U.S. economy created 222,000 new jobs in July. Also, the unemployment rate is expected to hold steady at 5.3 percent. Investors will be keeping an eye on the job growth numbers as the U.S. Federal Reserve chief Janet Yellen has made it clear she's looking out for "some" improvement in the job market before voting for the first Fed interest rate rise in nearly a decade. On Wednesday, the ADP National Employment Report is likely to show U.S. private employers added 215,000 jobs in July, down from a previous month's 237,000 jobs. Also, next week's focus will be on Wednesday's data on services sector growth, business activity index and employment index from the Institute for Supply Management. Separately, on Tuesday, the Commerce Department's figures on new orders for manufactured goods is expected to have increased 1.8 percent in June after a drop of 1.0 percent in May.
Media company 21st Century Fox Inc reports on Wednesday fourth-quarter results for the first time since James Murdoch took over as CEO. Wall Street expects the company to post earnings of 37 cents per share, down from 42 cents a year earlier, according to Thomson Reuters I/B/E/S. The company is facing a weaker advertising market, ratings declines at the Fox broadcast network and tough comparisons for its film studio.
Drugmaker Regeneron Pharmaceuticals Inc - bolstered by strong demand for blockbuster eye drug Eylea - is set to report on Tuesday better-than-expected adjusted second-quarter profit for the first time in six quarters, according to Thomson Reuters StarMine. Regeneron had forecast sales of its flagship drug to be 30-35 percent higher this year.
Power company Duke Energy Corp is expected to report a lower second-quarter profit on Thursday, hurt by rising costs and weakness in its international business. The company, which is shifting its focus to regulated power markets from volatile wholesale markets, said in May it had cut about 15 percent of its workforce. Investors will want to know more about Duke's cost-cut measures and its plans for its international operations. Continued...