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