What to Watch in the Week Ahead and on Monday, March 28
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WEEK AHEAD A raft of data next week ranging from manufacturing to home prices and the labor market will offer a fresh perspective of the U.S. economy and clues on whether the Federal Reserve will raise interest rates in June. A report on Tuesday is expected to show that the Case/Shiller house price index rose 5.9 percent in January from a year earlier. On Wednesday, payrolls processor ADP is expected to report private payrolls increased by 194,000 jobs in March after adding 214,000 in February. Labor Department's closely watched employment report on Friday is expected to show that nonfarm payrolls increased by 205,000 jobs in March after increasing 242,000 in February. The unemployment is forecast holding steady at an eight-year low of 4.9 percent. Average hourly earnings are seen rising 0.2 percent after slipping 0.1 percent in February. Also on Friday, the Institute for Supply Management is expected to report its national manufacturing index increased to 51 in March, swinging back above the 50 mark for the first time since September, from a reading of 49.5 in February. Other reports on Friday are likely to show consumer sentiment and automobile sales picked up in March. Investors will be looking for hints on future rate hikes when Federal Reserve Chair Janet Yellen speaks on Tuesday before an Economic Club of New York luncheon. Several Federal Reserve presidents will also be busy at speaking engagements next week. Federal Reserve Bank of Chicago President Charles Evans will speak on current economic conditions and monetary policy before the Forecasters Club of New York on Wednesday and before the Quinnipiac G.A.M.E. VI Forum on Thursday. On Friday, Federal Reserve Bank of Cleveland President Loretta Mester speaks on the economic outlook and monetary policy before the New York Association for Business Economics. Federal Reserve Bank of Dallas President Robert Kaplan participates on Tuesday in moderated Q&A session before the Austin Chamber of Commerce and the McCombs School of Business. On the same day, Federal Reserve Bank of San Francisco President John Williams delivers his first set of prepared remarks since the Federal Reserve held rates earlier in March and downgraded its forecast to two from four hikes this year. Investors will look for whether Williams signs up to the more cautious outlook espoused by Federal Reserve chair Janet Yellen. He speaks on "Steering the U.S. Economy Through Turbulent Seas" before an event hosted by the National University of Singapore. On Thursday, Federal Reserve Bank of New York President William Dudley speaks on "The Role of the Federal Reserve - Lessons from Financial Crises" before the Virginia Association of Economists 43rd Annual Meeting.
Carnival Corp, the world's largest cruise ship operator, reports first-quarter results on Wednesday. Investors will be looking out for any changes to the 2016 forecast, comments on China, where the company has been increasing its presence, and on launch of cruises to Cuba. They will also watch out for updates on the Zika outbreak, which the company has said has had no impact so far on its operations.
BlackBerry Ltd is expected to post another loss when it reports fourth-quarter results on Friday, with much investor attention to focus on whether gains in software revenue can offset declining legacy fees. The company is struggling to rebuild its business model after being shunted aside in the consumer smartphone market by Apple's iPhone and devices using Google's Android software. Investors will also be eager to see sales numbers for BlackBerry's Priv smartphone, which runs Android and launched in a string of countries in the quarter. Revenue is expected to rise from the preceding quarter for the second straight time after nine quarter-on-quarter declines.
Memory chipmaker Micron Technology Inc is expected to report second-quarter revenue and profit slightly below analysts' average estimates on Wednesday, according to Thomson Reuters StarMine data. Analysts will be focusing on current-quarter forecast to gauge demand for memory chips and how pricing pressure will continue to impact the company. Tesla Motors Inc unveils on Thursday its hotly anticipated Model 3, a $35,000 mass-market electric car intended to broaden the company's vehicle range and take market share from a host of competitors such as Toyota, Nissan and General Motors. The main economic event in Canada next week will be monthly gross domestic product released on Thursday. Economic growth is expected to pick up by 0.3 percent in January, likely reinforcing expectations that first-quarter growth will exceed the Bank of Canada's 1 percent forecast.
Bank of Canada deputy governor Lynn Patterson speaks on "Adjusting to the Fall in Commodity Prices: One Step at a Time" on Wednesday in Alberta, Canada's main energy-producing province that has been hit hard by low oil prices.
Brazil's primary budget deficit for February is due to be released on Wednesday. Brazil posted a primary budget surplus of 27.913 billion reais in January. Brazil's producer price index and industrial production data are due on Thursday and on Friday, respectively. Separately, Mexico's statistics agency will issue seasonally adjusted unemployment rate on Wednesday and economic activity data on Tuesday. Mexico's economy was flat in December from November and expanded 2.6 percent from December of 2014. The Bank of England will release on Tuesday a quarterly assessment of risks to UK's financial stability, any action banks need to take, as well as details of its 2016 bank stress test and work it has done on underwriting standards for buy-to-let mortgages. U.S. President Barack Obama calls the fourth, and last, international Nuclear Security Summit of his presidency on Thursday and Friday at the Washington Convention Center. Obama will also host Chinese President Xi Jinping on Thursday for a bilateral meeting. On Thursday, French Finance Minister Michel Sapin and People's Bank of China Governor Zhou Xiaochuan host G20 finance ministers and central bank governors for an all-day high-level seminar on the international financial architecture in Paris. Sessions are to be held specifically on international capital flows, global financial safety nets, and monetary issues.
ON MONDAY, MARCH 28 Continued...