What to Watch in the Week Ahead and on Monday, March 7
(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 U.S. markets come off a week of strong economic data pushing up against one-month highs in the stock market and notable resistance levels in the bond market. The test will be whether asset classes will try to keep moving higher, especially given the high correlation between investors trading oil, stocks, Treasury inflation securities and other assets. Earnings have receded, and economic data is light, as are scheduled Fed speakers, so that will keep the market reacting to overseas events. It is going to be a quiet week with only second-tier data due for release. The Commerce Department's data on January wholesale inventories on Wednesday could shed more light on how much of drag inventories will be on first-quarter growth. Revised fourth-quarter GDP data showed businesses had made less progress than previously thought in reducing the inventory overhang during the quarter. A Reuters survey of economists forecast wholesale inventories falling 0.2 percent in January after decreasing 0.1 percent in December. On Thursday, the Commerce Department will release its quarterly services sector report for the fourth quarter, which could impact on the consumer and business spending estimates, and therefore GDP growth for the final three months of 2015. The Labor Department's February import prices report is expected to show dollar strength and weak global demand keeping imported inflation pressures subdued. According to a Reuters survey of economists, import prices likely fell 0.7 percent in February after declining 1.1 percent in January. Dollar General Corp reports fourth-quarter results on Thursday. The No.2 U.S. discount retailer cut its full-year sales forecast in December after sales growth slowed in its third quarter, as its core low-income customer base held back spending. Weak consumer spending likely weighed on results this quarter as well, as larger rival Dollar Tree and big-box rival Wal-Mart reported lower-than-expected sales, hit by a strong dollar and a drop in food prices. On Wednesday, Square Inc will report its first quarterly results since it made its market debut in November. The mobile payments company, headed by Twitter CEO Jack Dorsey, is expected to report fourth-quarter revenue slightly below estimates, according to Thomson Reuters StarMine data. The company faces intense competition in the payments market and has been investing heavily in new hardware. On Tuesday, IMF First Deputy Managing Director David Lipton speaks at the National Association for Business Economics Annual Economic Policy Conference in Washington. On the same day, U.S. Treasury Assistant Secretary for Economic Policy Karen Dynan is scheduled to speak on "a view from the Treasury Department" at the National Association for Business Economics Annual Economic Policy Conference in Washington. U.S. airlines will give presentations at the JPMorgan aviation conference, beginning Tuesday. American Airlines, Southwest Airlines and others will present to investors on their financials and strategy at this annual conference. Investors will be looking for any updates on the impact airlines have seen from the Zika virus and for new forecasts, if any, on their passenger unit revenue, an indicator of traveler demand. The main event in Canada next week will be the Bank of Canada's interest rate decision on Wednesday. The central bank is expected to hold rates at 0.50 percent, opting for patience over action as it waits to see what the impact of the government's expected spending measures will be and as it allows the effects of last year's two rate cuts to filter through the economy. The other major economic release will be Friday's jobs report, which is expected to show the economy added 5,500 jobs in February, nearly offsetting the loss seen the month before. That is expected to keep the unemployment rate at a two-year high of 7.2 percent. On Tuesday, LATAM Airlines will report fourth-quarter and full-year earnings. Economic woes in Brazil have weighed heavily on Latin America's largest airline, not to mention currency headwinds and now Zika, which is likely to affect long haul, the one part of its business that was doing well. The company is seen making a net loss for the third year in a row. Mexico's inflation data for February will be available on Wednesday. On Friday, industrial production data will be released for January after the gauge fell for a third straight month in December. On Thursday and Friday, finance minister Luis Videgaray and central bank governor Agustin Carstens will participate in the annual banking conference in Acapulco. ON MONDAY, MARCH 7 Ahead of the Fed's next policy meeting, Federal Reserve Vice Chair Stanley Fischer speaks before the National Association for Business Economics Annual Economic Policy Conference in Washington. Fischer has been a key voice trying to keep the door open for rate hikes, arguing that the various headwinds should prove temporary. He'll have a chance to refresh his views about the risks facing the United States. (1230/1730) Federal Reserve Board Governor Lael Brainard speaks before the Institute of International Bankers conference in Washington. Brainard's latest comments could give some perspective on whether she thinks conditions in the United States are proving durable enough for the Fed's liftoff to continue. (1200/1700) U.S. Treasury Under Secretary Nathan Sheets will also be speaking at the event. (1400/1900) Urban Outfitters Inc is expected to report fourth-quarter profit slightly above analysts' estimates, according to Thomson Reuters StarMine. Strong demand for the apparel retailer's bohemian-inspired Free People brand has lured shoppers to its stores in the holiday season. However, an unusually warm winter, which hurt sales of cold weather apparel like coats and jackets, could affect the company's Anthropologie and namesake brands. Investors will look for a commentary on store traffic and sales for the first quarter. After a slew of poorer-than-expected data for January, economists are predicting the first monthly economic retraction in Chile in January since 2009. The IMACEC economic activity index, encompassing about 90 percent of the economy tallied in gross domestic product figures, likely fell 0.1 percent in January from the same month a year earlier. Separately, Mexico's national statistics institute releases consumer confidence data for February. LIVECHAT - SIGNS THE U.S. ECONOMY IS STALLING with TrimTabs Investment CEO David Santschi U.S. Treasury income and employment taxes from the paychecks of 141 million U.S. workers are slowing, a worrisome and reliable indicator that may signal U.S. recession, according to David Santschi's TrimTabs Investment Research data and distinctive methodology. (1200/1700) 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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