CORRECTED-What to Watch in the Week Ahead and on Monday, Feb 1
(Corrects item 2 to say non-farm payrolls are expected to rise by "190,000", not "200,000"; January non-manufacturing sector index is expected to fall to "55.1", not "55"; 4th-qtr non-farm productivity is expected to fall at "1.6 percent" annual pace, not "1.2 percent"; December factory orders are expected to drop "2.6 percent", not "2.3 percent"; December trade deficit estimate is "$43 billion", not "$42.6 billion". Corrects item 38 to say income is expected to increase "0.2 percent", not "0.3 percent") WEEK AHEAD The market exits its worst opening month in a year since 2009 and looks ahead to another round of earnings reports, a heavy dose of economic data and expectations that the dollar is ready for another round of appreciation after the Bank of Japan's surprising move to shift to negative rates. Investors will also get a look at the results of Alphabet Inc, Pfizer Inc, Exxon Mobil Corp, Merck & Co and United Parcel Service Inc. The focus remains similar: tightening monetary and market conditions and concern about whether growth is strong enough to warrant the market adding more to the late January gains that offset some of the losses earlier in the month. A raft of data next week, including the employment report for January, could offer fresh clues on the health of the U.S. economy after growth slowed abruptly in the fourth quarter. The Labor Department's closely watched employment report on Friday is expected to show non-farm payrolls increased just 190,000 in January, according to a Reuters survey of economists, as some of the boost from the mild weather and holiday hiring fades. The unemployment rate is expected to stay at a 7-1/2-year low of 5 percent. Payrolls processor ADP is seen reporting on Wednesday that private employers added 195,000 jobs in January, lower than the 257,000 they added in December, according to a Reuters survey. Separately, the ISM is expected to report that its non-manufacturing sector index slipped to 55.1 in January from 55.3 in December. Data on Thursday from the Labor Department is likely to show that non-farm productivity dropped at a 1.6 percent annual pace in the fourth quarter, according to a Reuters survey. Separately, data from the Commerce Department is expected to show a 2.6 percent drop in factory orders in December after a 0.2 percent dip in November. On Friday, the department is expected to report that the trade deficit was little changed at $43 billion in December, according to a Reuters survey of economists. Exxon Mobil Corp, the world's largest publicly traded oil company, is expected to report on Tuesday that its profit in the fourth quarter halved from a year earlier as crude oil prices plunged. A 70 percent fall in oil prices is also expected to have hurt Occidental Petroleum Corp, the No.4 U.S. oil producer, and ConocoPhillips, the largest independent oil and gas company, both of which are expected to report a fourth-quarter loss on Thursday compared with a year-earlier profit. Investors will focus on Occidental's 2016 capital spending plans and production. Occidental exited North Dakota's Bakken shale field last year to focus on its core Texas shale fields. As for ConocoPhillips, investors will watch out for any cuts to the Houston-based company's generous dividend as a means of conserving cash. In its results announcement on Wednesday, U.S. refiner Marathon Petroleum Corp is expected to report a fall in fourth-quarter profit as the price difference between U.S. crude and Brent crude contracts. Diesel prices are also weakening due to falling demand and elevated inventories, hurting margins at refiners such as Marathon. Drugmaker Pfizer Inc, a Dow component, reports its fourth-quarter results on Tuesday. The same day, Gilead Sciences Inc, the maker of blockbuster hepatitis C treatment Harvoni, is expected to report a rise of more than 20 percent in its fourth-quarter earnings. Gilead, which has been criticized for its high-priced treatment, is facing new competition after Merck & Co Inc's similar treatment was approved by regulators this week. Merck is seen reporting slightly lower quarterly sales on Wednesday, hurt by the stronger dollar and declining sales of its Remicade arthritis treatment. Investors will be mostly focused on how the company's new immuno-oncology drug Keytruda is doing in its ongoing battle with Bristol-Myers Squibb's similar Opdivo treatment for melanoma and lung cancer. Comcast Corp, the largest U.S. cable operator, is expected to report fourth-quarter revenue above the average analyst estimate on Wednesday, according to Thomson Reuters StarMine. Comcast has benefited from growth in customer additions at its high-speed Internet business. As viewers gravitate toward online video offerings, pay-TV operators including Comcast are battling streaming video services from Netflix Inc and Hulu for subscribers. United Parcel Service Inc, the world's largest package delivery company, will announce its fourth-quarter results on Tuesday. Early indications are that the Atlanta-based company, after two poor holiday seasons in a row, managed to handle Christmas package volumes while keeping its costs down. Investors will be looking for details on what the package giant got right and how it plans to make Christmas 2016 a success amid the unpredictable and chaotic rise of ecommerce. MetLife Inc, the biggest U.S. life insurer, is expected to report a slight decline in its fourth-quarter profit on Wednesday as higher interest rates led to losses in its derivatives portfolio. The company has long relied heavily on its substantial derivatives program to hedge against risks that insurers are exposed to, such as currency exchange rates, volatile equities markets and changes to interest rates. MetLife announced plans this month to spin off a substantial portion of its U.S. retail business in an attempt to avoid being considered a "too-big-to-fail" financial institution, which need bigger capital cushions. The company, which is in a legal tangle over this label, may provide further details on the initial public offering or sale of the retail business. Dow Chemical Co, which is merging with rival DuPont, is expected to report a lower fourth-quarter profit on Tuesday as weak crude prices weigh on selling prices of plastics and related chemicals. Activist investor Daniel Loeb, who had been lobbying to get the company to break itself up, has called for the removal of Chief Executive Andrew Liveris after Dow's merger with DuPont. Investors will seek more details on the deal. General Motor Co reports fourth-quarter and full-year 2015 results on Wednesday. Company executives have already signaled that the carmaker would report robust earnings and maintain a bright outlook for 2016. GM and rival Ford Motor Co have each been reporting results and outlook that show that both companies have come back strong after the 2008 recession. If GM carries out its plan, the once-bankrupt automaker will have returned to shareholders about $23 billion between 2012 and the end of 2017, or about 90 percent of its free cash flow. GM has allied with several companies including ride-sharing Lyft as it attempts to evolve with the transforming transportation industry. Yahoo Inc is expected to report fourth-quarter earnings below the average analyst estimate, according to Thomson Reuters StarMine. The online search and advertising company has been struggling to boost revenue from ad sales in the face of stiff competition from Google and Facebook Inc. Yahoo has been developing content for its mobile platform to drive user engagement. When the company reports on Tuesday, the focus will be on updates on the reorganization and the spinoff of its core business. National health insurer Cigna Corp is forecast to report a rise in its fourth-quarter profit on Thursday. The company, which specializes in large employer insurance, recently said that new enrollment in its 'Medicare Advantage' program had been shut down by the government. Cigna is also under scrutiny by antitrust regulators for its deal with Anthem Inc. Yum Brands Inc, the owner of the KFC and Pizza Hut chains, is expected to report fourth-quarter earnings above the average analyst estimate on Wednesday, according to Thomson Reuters StarMine. The company, which is spinning off its dominant China business, reported a slight rise in sales at established China restaurants in December. The company has also said it will return up to $6.2 billion to shareholders before separating its China business and listing it on the New York Stock Exchange, and possibly in Hong Kong. Investors will look for commentary on sales in the United States, where fast-food companies are promoting aggressively to win back customers, the impending China business spinoff and sales forecast for China. LinkedIn Corp, the world's biggest professional networking website operator, is expected to report fourth-quarter revenue and profit above analysts' expectations on Thursday, according to Thomson Reuters StarMine. Investors are keen to see how the company has built upon its growing recruitment services business and how much revenue it has generated from advertisements and paid memberships. Factory automation equipment maker Emerson Electric Co is expected to report lower first-quarter revenue on Tuesday. The company, which makes equipment for oil and gas and refining industries, has been under pressure from falling oil prices as its energy customers cut back on spending. Investors will be looking for an update on the company's full-year forecast and the planned spinoff of its network power business. Satellite radio service provider Sirius XM Holdings Inc is expected to report fourth-quarter revenue and profit above analysts' estimates on Tuesday, according to Thomson Reuters StarMine. In October, Sirius had raised its full-year forecast for revenue and subscriber additions for the third time, citing strong U.S. auto sales. In December, the company and 'shock jock' Howard Stern renewed their five-year deal for his popular 'Howard Stern Show'. Analysts will look for details on whether the deal is expected to help Sirius attract new subscribers and retain existing ones. Home and auto insurer Allstate Corp is expected to report a rise in fourth-quarter profit on Wednesday, helped by lower catastrophe losses. Earnings could also be boosted by rising U.S. auto sales, which set a new record for 2015. However, rival Travelers Cos Inc reported a fall in quarterly profit as its underwriting gains fell and the company earned less from its fixed income and energy investments. Charter Communications Inc, whose $56 billion acquisition of Time Warner Cable Inc is under U.S. regulatory review, is expected to report fourth-quarter profit above the average analysts' estimate, according to Thomson Reuters StarMine. This month, the U.S. Federal Communications Commission (FCC) delayed its informal deadline by 15 days to review the proposed merger. Investors will look for details on the deal, which has been approved by the companies' shareholders and most U.S. states, but is awaiting clearance from the U.S. Department of Justice and the FCC. Beauty products maker Estee Lauder Cos Inc is expected to report second-quarter revenue and profit in line with analysts' estimates on Friday, according to Thomson Reuters StarMine. The company has been seeing a revival in sales in North America, helped by product launches and acquisitions. However, it has had to increase promotions in its flagship Clinique and Estee Lauder brands, which have seen weak sales. An extensive online presence has helped increase demand for the company's smaller brands catering to younger customers, such as Smashbox and Bobbi Brown. Although sales in overseas markets such as the UK and China are growing in double-digit percent, a stronger dollar has stripped their value. Royal Caribbean Cruises Ltd is expected to report fourth-quarter profit and sales in line with analysts' estimates on Tuesday, helped by pricing and good bookings. The cruise operator, however, may have been hurt by the slowdown in China, where Royal Caribbean and rivals have been investing heavily to gain market share in what is considered as the next big market for cruises. Investors will look for Royal Caribbean's 2016 forecast and comments on China and the impact of the Zika virus outbreak. Chipotle Mexican Grill Inc is expected to report a decline in fourth-quarter sales at established restaurants, its first ever fall as a listed company, on Tuesday. The burrito chain operator has been plagued by a series of food poisoning outbreaks in recent months. Chipotle cut its fourth-quarter sales forecast, mainly due to the latest norovirus incident at a Boston restaurant in December. Investors will look for commentary on food safety measures and sales forecast for the current quarter. Medical device maker Boston Scientific Corp is expected to report a fourth-quarter profit slightly above the average analyst estimate, according to Thomson Reuters StarMine. The company's revenue is likely to have got a boost from sales of its cardiac stent and urologic device. Investors will watch for details on the company's two new heart devices, which are set to be launched in the United States by the first half of 2016. In its first-quarter results on Wednesday, Keurig Green Mountain Inc is expected to report a profit below analysts' expectations, according to Thomson Reuters StarMine. Europe's JAB Holding Co said in December that it was leading a $13.9 billion buyout of the K-Cup single-serve coffee pods maker to become the biggest player in North America's single-serve coffee market. Keurig has been grappling with slowing sales and has said it is reducing its workforce by about 5 percent to cut costs. Investors will be looking for commentary on the impending deal. Tyson Foods Inc, the biggest U.S. meat processor, is expected to beat analysts' estimates on its first-quarter sales on Friday, according to Thomson Reuters StarMine. The Hillshire Brands prepared foods business, which Tyson bought in 2014, is expected to have had strong sales in the quarter. Margins in Tyson's chicken business are also likely to have been higher, helped by improving prices and low chicken feed costs. Michael Kors Holdings Ltd is likely to report third-quarter sales above the average analyst estimate on Tuesday, according to Thomson Reuters StarMine. The handbag maker has been focusing on new designs such as cross-body satchels and large wallets. Once a frontrunner in the handbag market, Kors has lost some of its 'affordable luxury' positioning due to over-distribution, which forced the company to offer heavy discounts. Analysts say Kors' investment in its ecommerce business is the right way ahead for the company as it looks to cater more to millennials. Walkie-talkie and radio systems maker Motorola Solutions Inc is expected to report fourth-quarter revenue slightly above analysts' expectations, according to Thomson Reuters StarMine. The company is counting on its services business to drive growth. Last year, the company said that private equity firm Silver Lake would invest $1 billion and that it would buy UK-based communications company Airwave Solutions Ltd to beef up that side of business. Cosmetics company Coty Inc is expected to reported second-quarter revenue in line with analysts' estimates on Thursday, according to Thomson Reuters StarMine. Coty was on an acquisition spree in 2015 as its looked to transform itself into a global beauty products giant amid weakness in its core perfumes business. The company said it would reorganize and focus on growing its digital capabilities to respond quicker to changing consumer behavior patterns. Coty agreed to buy over 40 brands from Procter & Gamble Co and the beauty care unit from Brazil's Hypermarcas to grow its beauty business. Investors will look for future acquisitions and forecast for the year. News Corp is expected to report second-quarter revenue and profit below the analysts' estimates on Thursday, according to Thomson Reuters StarMine. The owner of the Wall Street Journal has reported three straight quarters of revenue declines, mainly due to lower print ad sales and currency headwinds. Investors will seek details on turnaround in the Rupert Murdoch-controlled company's news and information business. How the company diversifies and adapts to the digital sphere, given its increasing struggles with the print business, will also be in focus. The same day, New York Times Co's fourth-quarter profit is expected to miss the average analyst estimate, according to Thomson Reuters StarMine. NYT, like many newspaper and magazine publishers, has been under relentless pressure to replace an evaporating pool of print ads dollars with digital ads and money from subscriptions. The newspaper publisher aims to double its annual digital revenue to $800 million by 2020 with a focus on winning over smartphone users. National Oilwell Varco Inc, the largest U.S. oilfield equipment provider, is expected to post a smaller first-quarter profit due to slumping oil prices. The company, which has been grappling with falling orders for new equipment, has been laying off employees to cut costs. In December, the company slashed about 1,500 jobs in Norway. When National Oilwell reports results on Wednesday, investors will look for details on its cost-cutting efforts. On Thursday, drilling contractor Patterson-UTI Energy Inc reports fourth-quarter results. The company is expected to post its third straight quarterly loss, hurt by falling demand in an oversupplied market. Patterson-UTI has cuts jobs and scrapped oil rigs to cut costs as oil prices slump. Media mogul Barry Diller's IAC/InterActiveCorp is expected to report fourth-quarter revenue and profit slightly below analysts' estimates on Wednesday. Earlier, the company's online dating service Match.com, which went public in November, was a big driver of revenue. Investors want to see how the company fares in the absence of the dating business. IAC, which owns Investopedia and video-sharing website Vimeo, reported a fall in its search and applications business in the third quarter. The company has been losing market share and subscribers as it charges customers membership fees to access reviews and ratings on its site that Yelp Inc, TripAdvisor Inc and others provide for free. Financial advisory and asset management firm Lazard Ltd is expected to report a rise in fourth-quarter profit, boosted by advisory fees for several billion-dollar deals in another busy quarter for mergers and acquisitions, particularly in Europe. Last year's low U.S. interest rates helped push merger activity to levels last seen before the 2008 financial crisis. Lazard advised on deals including AB InBev's $100 billion-plus takeover of rival brewer SABMiller, oil major Royal Dutch Shell's $50 billion takeover of BG Group, and the $103 billion merger of chemical titans DuPont and Dow Chemical. Some analysts think Lazard may announce a share buyback along with its results on Tuesday as it had upwards of $1 billion in cash and investments at the end of September, and the company's shares have lost about a quarter of their value in the past year. Dunkin' Brands Group Inc is expected to report fourth-quarter revenue slightly below the average analyst estimate on Thursday, according to Thomson Reuters StarMine. Price hikes by the franchisees, in response to the company's wage increase, is likely to have hurt traffic at Dunkin' Donuts outlets in the quarter. Aggressive promotions by restaurant chains, including Wendy's "4 for $4" deal and Burger King's $1.49 chicken nuggets, likely ate into the company's sales, analysts believe. Investors will look for comments on the impact from the blizzard on the East Coast, where the Dunkin' Donuts and Baskin-Robbins owner has a huge presence. Antivirus software maker Symantec Corp is expected to report third-quarter revenue slightly above analysts' expectations on Thursday, according to Thomson Reuters StarMine. Symantec, best known for its Norton antivirus software, said earlier this month that it expected third-quarter revenue and adjusted earnings to be above the midpoint of its forecasts. The company also said it would receive $1 billion less in cash for its sales of data storage unit Veritas. Take-Two Interactive Software is expected to report third-quarter revenue and profit above analysts' estimates, according to Thomson Reuters StarMine. The videogame maker is expected to benefit from higher-margin digital game sales, the new release of wrestling game WWE 2K16 and continued strength of its flagship Grand Theft Auto. On Wednesday, when the company reports results, analysts and investors will look for details on its forecast for 2017 and whether any blockbuster Rockstar game is on the cards after Rockstar North President Leslie Benzies, reportedly responsible for the GTA series gameplay, left the company earlier this month. Online food order and delivery company GrubHub Inc is expected to report fourth-quarter profit below the average analyst estimate, according to Thomson Reuters StarMine. The company, which took only meal orders previously, has been investing heavily in its food delivery business. This has hurt its margins. GrubHub, scheduled to report results on Thursday, bought a restaurant delivery service Delivered Dish and also announced expansion of its delivery service to Philadelphia. Shutterfly Inc, which provides personalized photo-based products, is expected to report fourth-quarter revenue and profit largely in line with analysts' expectations, according to Thomson Reuters StarMine. Investors will seek details on the number of customers using the company's online photo-sharing service, which enables users to share, print and preserve their memories. On Tuesday, Mexico's central bank will publish its survey of analysts on inflation and growth. The Manufacturing Purchasing Managers' Index (PMI) for January will also be released on the same day. The index had hit a three-month low in December. On Thursday, Mexico's central bank will announce its monetary policy decision. The bank hiked rates for the first time in seven years in December, following February's 25 basis point move. Gross fixed investment data will also be released on Thursday. On Friday, data on Mexico's consumer confidence will be released for January. The indicator fell in the prior month. ON MONDAY When Alphabet Inc reports its fourth-quarter results, all eyes will be on the company's first disclosure on the revenue it gets from what it calls "Other Bets", such as Calico, Nest and its secretive Google X, giving an insight into how the company works outside its highly profitable search engine. Alphabet's new chief financial officer, Ruth Porat, has said she will focus on effective capital allocation, balancing it with investments in its "moonshot" projects. Analysts will be looking for Google's continued momentum in search traffic on mobiles, which surpassed desktop traffic worldwide for the first time in October. The Institute for Supply Management (ISM) is expected to report that the national manufacturing index ticked down to 48 in January from 48.2 in December. Also the same day, the Commerce Department is expected to report that consumer spending edged up 0.1 percent in December and income increased 0.2 percent, according to a Reuters survey of economists. A second report from the department is expected to show construction spending rebounded by 0.6 percent in December after falling 0.4 percent in November. Aetna Inc, the third-largest U.S. health insurer, is expected to report a fall in its fourth-quarter earnings, hurt by an increase in health insurance taxes and lower-than-anticipated enrollment in the health insurance exchanges set up under Obamacare. Anadarko Petroleum Corp, which made an unsuccessful attempt to buy rival Apache Corp last year, is expected to report a fourth-quarter loss that reflects the slump in crude oil prices. Mattel Inc is expected to report a fourth-quarter profit above the average analyst estimate, according to Thomson Reuters StarMine. Analysts say the 56-year-old Barbie brand had a strong holiday quarter after eight straight quarters of declining sales. The company also expects to benefit from its Star Wars-licensed Hot Wheels toys. Investors will await the company's forecast and commentary on sales and its recent release of Barbie dolls with new body shapes. The RBC Canadian Manufacturing PMI, a measure of manufacturing business conditions, is expected for January. The index fell to its lowest level, a seasonally adjusted 47.5, in December. LIVECHAT-GLOBAL FLOWS with Lipper Jeff Tjornehoj Lipper's research chief for the Americas Jeff Tjornehoj takes questions from traders, portfolio managers and Reuters journalists on what changing flows say about asset allocations, hot and cold sectors and the varying appeals of regions and industries. (1030/1530) To join the Global Markets Forum, click here bit.ly/1kTxdKD (Compiled by Astha Rawat in Bengaluru; Editing by Kirti Pandey)
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