CORRECTED-What to Watch in the Week Ahead and on Monday, Nov 2
(Corrects construction spending forecast in paragraph 36 and name of Cigna Corp in paragraph 6; also re-orders blurbs) WEEK AHEAD Domestic U.S. economic indicators could dominate markets as all are watching for signs of strength that could clear the way for the Federal Reserve's first rate cut in years - or weakness that could move that rate hike off the table for 2015. Equities could drift in response to earnings reports - with some big names including CVS and Chevron reporting early in the week - while making bigger moves in response to those data points. On Monday, the Institute for Supply Management will publish its survey of purchasing managers; poor sentiment there, coupled with a weak jobs report on Friday could paradoxically strengthen stocks if investors thought the Fed would sit tight on its zero interest rate policy. Similarly, weak data could cause bonds to rally late in the week and the dollar could slide as well. Should the economic data come in strong, bonds and stocks could end the week with more selling than buying, while the dollar would strengthen against other major currencies. Social media company Facebook Inc said last quarter it would increase investments in areas such as Messenger, WhatsApp and Oculus to boost advertising revenue from mobile and drive future growth. Despite an increase in spending, Facebook is expected to report third-quarter profit above analysts' average estimate on Wednesday, according to Thomson Reuters StarMine data. Walt Disney Co's fourth-quarter revenue is likely to miss analyst average estimate on Thursday, according to Thomson Reuters StarMine. The media company lowered its profit forecast for its cable networks unit in August as it expects a decline in subscribers and impact from foreign exchange rates. Investors will be looking for any comments on its struggling sports network ESPN, which is in the middle of a reorganization, and guidance on cable subscriber numbers. Chipmakers Qualcomm Inc is expected to report a fourth-quarter profit above analysts' average estimate on Wednesday. Investors will be looking for signs of a recovery in the intense competitive chipset business as well as commentary on cost control. On Thursday, Nvidia Corp too is likely to report better-than-expected third-quarter profit and revenue. The graphics chipmaker's gaming revenue is expected to have risen, helped by the popularity of its GeForce gaming chips. On Wednesday, Allergan Plc, which is in preliminary talks with Pfizer Inc to become the world's largest drugmaker, will be posting third-quarter profit which edges past market's estimates. On Thursday, Celgene Corp is set to report better-than-expected profit and revenue in the third quarter, as strong demand for its cancer treatments Revlimid and Abraxane, and psoriasis drug Otezla overcome the impact of a strong dollar. On Wednesday, Regeneron Pharmaceuticals Inc is expected to report third-quarter earnings above analysts' average estimates, according to Thomson Reuters StarMine data, driven by higher sales of the company's blockbuster eye drug, Eylea. Health insurers Cigna Corp, Humana Inc and WellCare Health Plans Inc are scheduled to report third-quarter earnings next week. Investors will be looking for comments on Obamacare individual plans after other insurers said they had faced challenges in that particular business. Both Cigna and Humana are being bought by larger rivals Aetna Inc and Anthem Inc respectively. While Cigna on Friday is expected to report earnings just shy of analysts' average estimates, results of Humana on Friday and WellCare on Wednesday are predicted to be in line with those estimates, according to Thomson Reuters Starmine. When Warren Buffett's Berkshire Hathaway reports third-quarter results on Friday, analysts on average expect quarterly operating profit per share to decline, in part reflecting a weak pricing environment for insurance and reinsurance. Overall net profit per share may be dampened by paper losses on derivatives and other investments because of declines in stock prices. Due to the increased value in Berkshire's stake in the newly combined Kraft Heinz, results are expected to reflect a non-cash gain to the tune of around $7 billion. Investors will focus on Friday's non-farm payroll numbers along with the ADP's data on private employment on Wednesday, auto sales figures on Tuesday, labor costs on Thursday and Purchasing Managers Index for the services sector on Wednesday. Payrolls outside of farming is likely to have increased to 178,000 in October, while private employers are expected to have added 185,000 jobs, compared with 200,000 jobs in September. Meanwhile, the pace of October growth in the services sector is likely to have fallen a bit from the previous month. Auto sales are also expected to have slowed in October. Federal Reserve Chair Janet Yellen testifies on Wednesday before the House Financial Services Committee on Federal Reserve actions and plans for bank regulation and supervision. Meanwhile, the Fed presidents will also be busy at speaking engagements next week. On Wednesday, the Federal Reserve Bank of Philadelphia President, Patrick Harker, speaks on "Why Pay for Success: The Need for New Sources of Social Innovation Capital" before the "Capital for Communities: Pay for Success Financing" event. Separately, Federal Reserve Board Governor Lael Brainard participates on Thursday in "Economic Forum: Policy Lessons and the Future of Unconventional Monetary Policy" before the International Monetary Fund "Unconventional Monetary and Exchange Rate Policies" Conference. On the same day, Chicago Fed President Charles Evans gives welcome and introductory remarks before the Eighteenth Annual International Banking Conference hosted by the Federal Reserve Bank of Chicago. The Atlanta Fed President, Dennis Lockhart, also speaks on the same day before the Joint Central Bank Conference. On Thursday, hollywood studio DreamWorks Animation SKG is expected to report third-quarter profit well below analysts' average estimate, according to Thomson Reuters StarMine. DreamWorks warned last quarter that sales and marketing costs will be higher in the second half of 2015 because of upfront costs associated with the Netflix contract and increased marketing for holiday classics. Twenty-First Century Fox Inc is expected to post first-quarter revenue below Wall Street estimates on Wednesday, according to Thomson Reuters StarMine. Fox, which has significant operations abroad, has been hit by the strong dollar. Fox had lowered its full-year earnings forecast in August. The Norton antivirus maker Symantec Corp is expected to report on Thursday second-quarter revenue slightly below analysts' average estimate, according to Thomson Reuters StarMine. Symantec, which agreed to sell its data storage unit Veritas in August, has been facing headwinds with lower demand for antivirus software as users turn to advanced products for protection against sophisticated cyber attacks. Cyber security company FireEye Inc is expected to report third-quarter results slightly below analysts' average estimate on Wednesday, according to Thomson Reuters StarMine. Elon Musk's Tesla Motors Inc is expected to report a wider-than-expected loss in the third quarter on Tuesday, according to Thomson Reuters StarMine data. Amid heavy spending, investors will look for commentary on expenses during the quarter and for the upcoming year. Sprint Corp is expected to report second-quarter profit above analysts' average expectations on Tuesday, according to Thomson Reuters StarMine data. Investors and analysts will look for comments on the wireless carrier's plans to cut an unspecified number of jobs and about $2-$2.5 billion in costs in the next six months. Activision Blizzard Inc is expected to post third-quarter profit above analysts' average estimates on Tuesday, according to Thomson Reuters StarMine data, helped by higher sales of its "Hearthstone" game. Investors will look out for the company's forecast for the much-anticipated "Call of Duty: Black Ops 3" game, ahead of the key holiday quarter. King Digital Entertainment Plc, the creator of "Candy Crush Saga" is expected to beat expectations on revenue for the third quarter on Wednesday, according to Thomson Reuters StarMine data. Investors will be looking at whether there has been an improvement in bookings for the quarter. Meanwhile, Zynga Inc is also expected to post revenue above analyst's average estimate and report a narrower loss on Tuesday, according to Thomson Reuters StarMine data, driven primarily by demand for its slots games. Cable company Time Warner Inc is expected to report third-quarter revenue marginally above analysts' average estimates on Wednesday, according to Thomson Reuters StarMine data. Time Warner has been remodeling its businesses to grab a larger share of the video-streaming market as consumers increasingly take to watching television shows online. Discovery Communications Inc, the operator of channels such as Animal Planet and TLC, is expected to report third-quarter results slightly below consensus on Tuesday, according to Thomson Reuters StarMine. The company has been hurt by lower ad sales, which accounts for almost half of total revenue, and a strong dollar. Cognizant Technology Solutions Corp is expected to report third-quarter results slightly above analysts' average estimate on Wednesday, according to Thomson Reuters StarMine. Cognizant has been benefiting from its fast-growing healthcare business that has led the company's growth for the past quarters. Motorola Solutions Inc, which makes walkie-talkies and radio systems, is expected to report third-quarter profit above average analysts' expectations on Wednesday, according to Thomson Reuters StarMine. Investors will be looking for a potential M&A opportunities after Silver Lake's $1 billion investment in the company. Magazine publisher Time Inc is expected to report third-quarter earnings on Thursday above Wall Street estimates, according to Thomson Reuters StarMine. The publisher of Sports Illustrated and the Time magazine has been on a cost-cutting spree as it looks to counter the decline in print advertising revenue. On the same day, News Corp, the publisher of the Wall Street Journal, is expected to report first-quarter results below analysts' average estimates, according to Thomson Reuters StarMine. Investors will look for revenue growth in its book publishing business, and also look for signs that the company is able to revive sales growth in its news and information unit. Molson Coors Brewing Co, the maker of Coors Light brew is likely to report third-quarter sales on Thursday slightly above analysts' average estimate, according to Thomson Reuters StarMine. The company is widely speculated to pick up the remaining stake in MillerCoors, its U.S. joint venture with SABMiller, if antitrust regulators require SABMiller to shed that business in order to give their green signal to Anheuser-Busch InBev's offer. When Kellogg Co reports its third-quarter results on Tuesday, investors will be looking for comments on recovery in the U.S. cereals business, where sales have been falling over the last two years. The U.S. power company Duke Energy Corp is expected to report a higher third-quarter profit on Thursday, helped by low fuel costs and strong demand for electricity in the summer. The company bought Piedmont Natural Gas last week to reduce its reliance on power demand, which tends to be seasonal and is on the wane due to increased energy efficiency. Oil and gas producer Apache Corp is expected to report a loss in the third quarter on Thursday, hurt by a prolonged slump in oil prices. The company said on Friday it had made "significant discoveries" in the North Sea and investors will look to see if the company plans to develop these assets, along with updates on spending in U.S. shale fields. Canadian oil and gas producer Penn West Petroleum Ltd is also expected to report a bigger quarterly loss on Thursday, stung by a steep decline in oil prices. The company has already suspended its dividend, slashed jobs, cut its capital budget and sold assets, and investors will look for comments on any further debt reduction when it reports third-quarter results. Also, Chesapeake Energy Corp is expected to report a loss in the third-quarter on Wednesday, compared with a profit a year earlier. Refiner HollyFrontier Corp is expected to report a higher third-quarter profit on Thursday as low crude costs boost margins. It was among the bidders for Citgo Petroleum Corp late last year and the target of Tesoro Corp in the first quarter. With neither deal working out, investors will look for comments on future M&A plans for the company. Similarly, Western Refining Inc's third-quarter profit on Tuesday is expected to beat analysts' average estimate, according to Thomson Reuters Starmine. Investors will look for more details on its offer to buy the shares of Northern Tier Energy LP it does not already own. Meanwhile on Wednesday, rig operator Transocean Ltd is expected to report a lower third-quarter profit as weak oil prices weigh on drilling activity. Investors will look for comments on new contracts and updates on existing rig orders. CBS Corp is expected to report third-quarter profit above analysts' average estimate on Tuesday, according to Thomson Reuters StarMine data, helped by higher revenue from affiliates and subscription fees. To help offset fluctuations in advertising revenue, CBS is focusing on boosting subscription and retransmission fees. The cosmetics company Coty Inc is expected to report third-quarter sales on Thursday above analysts' average estimates, according to Thomson Reuters StarMine. In the face of rapidly declining demand for perfumes, and a renewed focus on personal care products sector, investors will be interested in any comments on the future of the company's perfume business. Michael Kors Holdings Ltd, the luxury handbag and accessories maker, is expected to report second-quarter sales above analysts' average estimates on Wednesday, according to Thomson Reuters StarMine. Kors is providing heavy discount to attract customers, hurting its brand image. Groupon Inc is expected to report third-quarter profit below analysts' average estimate on Tuesday, according to Thomson Reuters StarMine data. The operator of daily deals website groupon.com has been struggling to boost sales as competitive deals on online marketplaces operated by Amazon.com Inc and eBay Inc make its coupons less attractive to shoppers. Web-hosting company GoDaddy Inc is expected to report third-quarter profit below average analysts' estimate on Wednesday, according to Thomson Reuters StarMine. GoDaddy has been investing heavily to expand into new markets and investors will be looking at some updates on the same. On Thursday, travel review website operator TripAdvisor Inc is expected to report third-quarter revenue below analysts' average estimates, according to Thomson Reuters StarMine. Investors will be looking out for updates on the company's room-booking deal with Priceline. Next week's Latin America's economic events will show Brazil and Chile's inflation on Friday, together with the number of car sales in Brazil on the same day, Brazil's industrial output on Wednesday and consumer attitude in Mexico on Friday. ON MONDAY, NOVEMBER 2 Visa Inc is likely to report fourth-quarter earnings in line with analysts' average estimates, according to Thomson Reuters StarMine. The world;s largest payments network operator is expected to announce the terms of a merger with former European subsidiary, Visa Europe. The deal is likely to alter the dynamics of competition in Europe, the biggest playing ground of Visa's arch rival MasterCard. Visa's results are likely to be helped by higher U.S. consumer spending boosted by lower gasoline prices. American International Group Inc (AIG), which became one of the year's largest activist campaigns on Wednesday after billionaire Carl Icahn urged it to break itself apart, is expected to report a sharp decline in third-quarter earnings as tumultuous markets cut into investment returns. Investors will be looking for comments about Icahn's proposal - which was supported by hedge fund manager John Paulson - as it has reportedly sparked talks among AIG directors about spinning off or selling the insurer's small mortgage-insurance business. U.S. Federal Reserve Chair Janet Yellen, Treasury Secretary Jack Lew, Comptroller of the Currency Thomas Curry, Federal Deposit Insurance Corp. Chair Martin Gruenberg, Securities and Exchange Commission Chair Mary Jo White and others are scheduled to attend a meeting of the Financial Stability Oversight Council in Washington. U.S. construction spending likely rose 0.5 percent in September, increasing for a ninth straight month, suggesting the economy remains on firmer ground despite some slowing in consumer spending and persistent weakness in manufacturing. Meanwhile, the pace of growth in the U.S. manufacturing sector is expected to have slowed in October. The Institute for Supply Management's index of national factory activity likely fell to 50.0 from 50.2 a month before. Estee Lauder Cos Inc's first-quarter sales are likely to beat analysts' expectations, according to Thomson Reuters StarMine. The beauty products company is working to make its heritage brands Clinique and Estee Lauder more youth friendly by increasing marketing efforts and innovation. However, heavy exposure to markets outside the United States will reduce Estee's sales value from those regions due to a strong dollar. The oil and gas producer Noble Energy Inc will likely swing to a loss in the third quarter as a steep decline in oil prices hurts profitability. Investors will look for an update on the company's plans for the large Leviathan gas field in Israel, which remains undeveloped due to opposition from the Israeli competition regulator. Fitbit Inc, the maker of wearable fitness tracking devices, is expected to report third-quarter profit and revenue above average analysts' estimate, according to Thomons Reuters StarMine. Fitbit has been rapidly adding new enterprise customers like Barclays Plc and Target Corp. The company also said in September that it has received industry compliance to expand its corporate wellness program. Commercial property and casualty insurer Loews Corp's third-quarter earnings are expected to be hurt by results of unit Diamond Offshore Drilling Inc, reporting on the same day, as the oil-services provider is putting lesser rigs to use. Loews could also face possible headwinds from energy exposure at its subsidiary, Boardwalk Pipeline Partners. The company's unit CNA Financial Corporation will also be reporting third-quarter results. LIVECHAT: FX Week Ahead with Reuters FX analyst Jeremy Boulton Join Reuters FX analyst Jeremy Boulton at 0500/1000 for a look at the week's top topics and implications for the FX market. To join the Global Markets Forum, click here bit.ly/1kTxdKD (Compiled By Nayyar Rasheed in Bengaluru)
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