What to Watch in the Week Ahead and on Monday, Feb 29

Fri Feb 26, 2016 3:16pm EST
 
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WEEK AHEAD

A raft of data next week ranging from employment, manufacturing
to automobile sales could offer more evidence that the economy
was regaining momentum after slowing in the fourth quarter. A
report on Tuesday from the Institute for Supply Management is
expected to show that the manufacturing downturn is close to
bottoming. According to a Reuters survey of economists, the
ISM's national manufacturing index likely edged up to 48.6 in
February from a reading of 48.2 in January. Also on Tuesday
motor vehicle manufacturers are expected to report that auto
sales rose to a seasonally adjusted annual rate of 17.65 million
units in February from 17.58 million units. The Commerce
Department is expected to report construction spending increased
0.4 percent in January after edging up 0.1 percent in December.
Data from payrolls processor ADP on Wednesday will likely show
that private payrolls increased by 190,000 jobs in February
after rising 205,000 in January. On Thursday, the ISM is
expected to report that its non-manufacturing index edged lower
to 53.4 in February. A report from the Commerce Department is
expected to show factory orders rebounded 2.0 percent in January
after slumping 2.9 percent in December. The Labor Department is
expected to report on Friday that nonfarm payrolls increased by
190,000 jobs in February after rising 151,000 in January. The
unemployment rate is seen steady at an eight-year low of 4.9
percent and average hourly earnings increasing 0.2 percent after
a 0.5 percent jump in January. A report from the Commerce
Department on Friday will likely show that the trade deficit
widened a bit to $43.5 billion in January from $43.4 billion in
December.

On Thursday, Hewlett Packard Enterprise Co, which houses the
former Hewlett-Packard Co's corporate hardware and services
businesses, is expected to report fourth-quarter revenue and
profit slightly below market consensus, according to Thomson
Reuters StarMine data. Analysts expect weak IT spending to hurt
HPE's services and storage businesses. Investors' focus will be
on how HPE, headed by Meg Whitman, plans to continue its
cost-cutting efforts to protect the bottom line.

Warehouse club retailer Costco Wholesale Corp is likely to
report second-quarter profit and sales slightly below analysts'
average estimate on Wednesday, according to Thomson Reuters
StarMine. Falling grocery prices, a slowdown in sales in January
and a strong dollar are expected to have weighed on sales and
margins in the quarter. The company gets about 27 percent of its
revenue from outside the United States.

Kroger Co is likely to have done well in the quarter, despite a
drop in food prices, as it gains market share in areas such as
Chicago. The supermarket operator is also likely to benefit from
the closure of 269 stores by Wal-Mart. When it releases
fourth-quarter results on Thursday, investors will also be
interested in any confirmation of the company being in the
running to acquire specialty grocery retailer Fresh Market, as
reported by Reuters in February.

Federal Reserve Bank of San Francisco President John Williams
will speak on the economic outlook before the Bishop Ranch Forum
in California on Wednesday. On the same day, the Federal Reserve
issues its so-called Beige Book, a compendium of anecdotes on
the health of the economy drawn from the central bank's sources
across the nation. It is expected to show further signs of
stress in the manufacturing and energy sectors.

The biggest dollar store chain, Dollar Tree Inc, is expected to
report fourth-quarter revenue on Tuesday above estimates,
according to Thomson Reuters StarMine data. The company, which
bought Family Dollar last year, has benefited from higher rents,
taxes and healthcare costs that have made its "$1 or less"
concept highly attractive to thrifty shoppers. Dollar Tree's
results serve as a barometer for the broader spending behavior
of low-income customers. While sales more than doubled in the
previous quarter, expenses tied to rebranding Family Dollar
stores ate into profit and margins. Analysts have said this
trend may hurt the legacy of the bigger company. Investors will
look out for any forecasts and strategic developments going
forward.

Teen apparel retailer Abercrombie & Fitch Co is expected to
report its 12th straight quarter of falling sales, when it
reports fourth-quarter results on Wednesday. Retailers have been
hurt by a long spell of warm weather, which is weighing on
winter apparel such as coats and jackets. Teen retailers are
forced to discount more to lure customers who are flocking to
trendier shops and embracing online shopping. Investors will
look for comments on recovery at the Abercrombie brand and its
performance so far in the heavily promotional first quarter. On
the same day, American Eagle Outfitters Inc is expected to
report fourth-quarter profit and sales below average analysts'
estimates, according to StarMine. Sales of the retailer, which
has focused on offering more items at full price and minimized
promotions, has been steadily recovering in the past year.
Investors will look for sales forecast for the first quarter and
commentary on inventory levels for the quarter ended January.

Barclays Plc, the 320-year-old lender, is posting its first
earnings report since new CEO Jes Staley was hired in December
to take a more aggressive stance on the bank's turnaround. In
the few months since Staley's appointment, Barclays has made
sweeping cuts across its investment bank and exited several
businesses across Asia, Central Europe, the Middle East and
North Africa. The bank, midway through a three-year
cost-reduction plan that involves shedding 19,000 jobs, is
expected to announce further strategic changes on Tuesday, and
post a full-year reported loss due to further PPI provisions and
tumultuous markets hitting the investment bank.

On Thursday, Barnes & Noble Inc is expected to report a
third-quarter profit slightly below analysts' estimates,
according to Thomson Reuters StarMine. As it continues to battle
for market share with online retailers such as Amazon.com, the
largest U.S. bookstore chain has been trying to turn around a
slump in sales by selling a variety of merchandise at its stores
including toys, signed books and craft brewing kits. However,
comparable sales rose only 1.6 percent in the holiday season,
while revenue fell due to lower online sales. Investors will
look for a forecast, comments on best-selling books and trends
during the holiday shopping season.

Mining equipment maker Joy Global Inc, which gets about 60
percent of its revenue from coal miners, is expected to report a
fall in its quarterly revenue, as customers have cut spending
due to weak prices. When it releases first-quarter results on
Thursday, investors will be looking for an update on fiscal 2016
financial forecast.

The most closely watched economic release in Canada next week
will be fourth-quarter gross domestic product released on
Tuesday. Canada's economy is expected to have slowed
substantially in the fourth quarter. Canada was in a mild
recession in the first half of 2015 and the country is
struggling to regain momentum as the low price of oil takes a
toll. Friday's trade figures will also be watched, with the
country's trade deficit forecast to have widened to C$1.10
billion in January after shrinking sharply the month before.
Analysts will be looking to see if the export sector can
maintain its momentum, which is key to the Bank of Canada's
outlook for the economy.

Canada's Maple Leaf Foods, one of the country's two big pork
processors with Olymel, reports fourth-quarter results on
Tuesday. Of interest to investors is an update on whether its
new facilities are ramping up production smoothly. The company
has made profits in only two of the past 11 quarters as it shut
down old facilities and opened new ones.

On Tuesday, the Mexican manufacturing PMI for February will be
released. The indicator eased to a four-month low in January. On
the same day, the fiscal balance for January will also be
published. On Wednesday, the central bank will release its
monthly analysts' poll on inflation and growth. Gross fixed
investment data for December will come out on Friday.

The top global fertilizer and lithium supplier, SQM, releases
fourth-quarter results on Tuesday. The opaque company, which is
trying to put a series of financial scandals behind it but still
has an ongoing tax probe and tussle with the government over a
lease, has seen its value wiped out by the ongoing corporate
governance issues as well as a steep drop in potash and iodine
prices.

Cetip SA Mercados Organizados, the largest clearinghouse in
Latin America, releases fourth-quarter results after markets
close on Friday. Management will host a conference call to
discuss results the following day.

ON MONDAY, FEBRUARY 29

Valeant Pharmaceuticals International Inc reports fourth-quarter
unaudited results, days after it restated earnings for the
previous two years over how it accounted for sales through its
former specialty pharmacy Philidor. Of interest to investors,
will be any update on an internal committee's study of Valeant's
previous relationship with Philidor and any news on when Chief
Executive Mike Pearson will return to the helm.

New York Federal Reserve President William Dudley speaks on
policy at a joint People's Bank of China conference in Hangzhou,
Zhejiang, China. While Dudley has expressed some concerns about
implications of the global market selloff, suggesting he would
hold off on another rate hike in March, he was last out sounding
confident on economic momentum and laughed off talk of negative
rates. Indeed U.S. data has been pretty solid, especially the
labor market. Dudley is a close ally of Fed Chair Janet Yellen
and he has a permanent vote on monetary policy. (2330 ET/0430
GMT)

The beleaguered hardwood flooring retailer, Lumber Liquidators
Holdings Inc, is likely to report a bigger loss and lower sales
than analysts had expected in its fourth-quarter results,
according to Thomson Reuters StarMine. The company's stock and
sales have been hammered since a "60 Minutes" report on CBS last
March reported that the retailer's laminates from China
contained excessive levels of formaldehyde. Shares took a
further beating this month after the U.S. Centers for Disease
Control and Prevention revised its report to say people exposed
to some types of laminate flooring sold by the company were
three times more likely to get cancer than previously estimated.
Investors will look out for 2016 forecast and any updates on
Chief Executive John Presley, who said in February he had been
diagnosed with leukemia.

The human resources software maker, Workday Inc, is expected to
report fourth-quarter results above analysts' average estimate,
according to Thomson Reuters StarMine data. Shares of the
company, along with that of other cloud-computing companies,
were hit this month after a weak sales forecast from Tableau
Software sparked worries about valuations and potentially
sluggish enterprise IT spending. However, analysts expect strong
booking during the quarter. Rival Salesforce, seen as a
barometer for the cloud-computing sector, said last week that
customers were stepping up purchases of its web-based sales and
marketing software despite economic uncertainty.

Economists predict the National Association of Realtors' pending
home sales index to have edged up 0.5 percent in January. (1000
ET/1500 GMT)

3D Systems Corp is expected to report fourth-quarter profit and
revenue above average analysts' estimate, according to Thomson
Reuters StarMine data. The 3D printer maker earlier this month
estimated fourth-quarter revenue above analysts' expectations
and said it would take $510 million-$570 million impairment
charge in the quarter. 3D Systems said in November it was taking
decisive steps to cut costs and better prioritize resources. The
company said in December it would end production of its consumer
Cube printer.

LIVECHAT - Keeping Score with Rick Horrow
With FIFA election drama dominating the headlines, Rick Horrow
delves into the business behind soccer: domestic, international,
sponsorship, Olympics, and more. Special guest Dennis Spencer,
Executive Vice President at Lagardère Sports and Entertainment
joins the discussion as we go Beyond The Scoreboard in this
soccer-based edition at 1100 ET/1600 GMT. To join the Global
Markets Forum, click here bit.ly/1kTxdKD

 (Compiled By Nayyar Rasheed in Bengaluru; Editing by Maju
Samuel)