What to Watch in the Week Ahead and on Monday, Aug. 25
(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 The benchmark Standard & Poor's 500 Index, which has been setting a series of records all year, is expected to hit the 2,000-points milestone next week. Investors and economists, however, are also keeping close watch of escalating tensions between Ukraine and Russia. While the steady rally continues in equities, the yield on the benchmark 10-year Treasury note continued to trade below 2.50 percent. On Thursday, the Department of Commerce is due to release its GDP data for the second quarter, which is expected to remain at 4 percent. Also on the same day, the National Association of Realtors is expected to release its Pending Homes Index for July. The Federal Reserve Bank of Dallas is expected to issue its Service Sector Outlook Survey for August on Tuesday. The Department of Commerce is scheduled to release building permits for July on Tuesday. Also expected to be released on the same day is durable goods for July. Soon after, consumer confidence for August is expected to be released. On Wednesday, the Mortgage Bankers Association is likely to release its weekly Mortgage Market Index. Discount retailer Dollar General, in the midst of a bidding war for smaller rival Family Dollar, had said in June it expects gross margins to improve in the second half of the year as it focuses on more profitable products such as accessories and stationery items. The company has been struggling to shore up margins after it slashed prices to keep its lower-income shopper base from being lured by retail giants Wal-Mart Stores Inc and Target Corp and Family Dollar. Analysts and investors will be looking out for comments on the company's next move following Family Dollar's rejection of its $8.95 billion bid, in favor of Dollar General's smaller offer, citing antitrust concerns. The company is scheduled to release results for the second quarter on Thursday. Separately, closeout retailer Big Lots is likely to report second-quarter earnings before markets open on Friday. Avago Technologies is likely to report better-than-expected third-quarter revenue, according to Thomson Reuters StarMine data, helped by higher demand for its radio frequency chips used in smartphones. Analysts expect the company to benefit from the deployment of Long Term Evolution. Separately, Analog Devices is scheduled to report its third-quarter results on Tuesday. Workday is likely to report better-than-expected second-quarter revenue, according to Thomson Reuters StarMine data, helped by strong demand for its cloud-based human resource software subscriptions. Analysts say the company is winning increasingly larger deals and signing up more Fortune 500 companies. Investors will look for management commentary on the size of deals in the pipeline for the second half of the year and growth outlook. The company is scheduled to report on Wednesday. Upscale jeweler Tiffany & Co is likely report second-quarter results on Wednesday, amid signs that sales of its lower priced silver items are picking up. The company said last month that, Michael Kowalski, its chief executive of 15 years, would retire next year and President Frederic Cumenal would succeed him. The company's efforts to refresh its design and to find the right balance between the pricey jewelry for which it is known and cheaper silver items seem to be paying off. Investors will look for the performance of its new designs and collections as well as its lower-priced silver items. Separately on Wednesday, e-commerce retailer Williams Sonoma is likely to report second-quarter results after markets close. Best Buy, the electronics retailer is likely to report second-quarter profit above analysts' average estimate, according to StarMine. Analysts expect the company to be helped by an improvement in consumer demand, stabilizing TV sales and product launches. CEO Hubert Joly's steps of removing layers of management, eliminating hundreds of jobs and shutting down of unprofitable stores have boosted Best Buy's cash reserves and started showing a turnaround in sales. The company is expected to report results on Tuesday. The three-day Alpbach economic conference in Vienna is scheduled to commence on Tuesday. Speakers include Polish National Bank Governor Marek Belka, Bank of Finland Governor Erkki Liikanen and ECB Governing Council member Ewald Nowotny. On Thursday, State-run Chinese offshore oil and gas producer CNOOC Ltd is expected to post a sharp fall in its first-half earnings as costs surged and production growth continued to sputter. CNOOC'S management will hold media briefing at 6pm Hong Kong time. Investors will look out for comments on cost cutting, production target and anything related to South China Sea. Abercrombie & Fitch is likely to report a second-quarter profit above analysts' expectations on Thursday, according to StarMine. Analysts expect demand and gross margin to have remained weak in the quarter as the company clears excess inventories through discounting and tries to woo back customers by expanding its merchandise. Separately, Guess, a company which designs, markets, distributes and licenses apparel and accessories for men, women and children is scheduled to report earnings for its second quarter on Wednesday. On Tuesday, Tivo, the digital video recorder maker is likely to report second-quarter profit and revenue above estimates, according to Thomson Reuters StarMine data, helped by strong subscriber growth. Last quarter, TiVo posted its strongest quarter of cable subscriber adds to date, with the highest overall net adds in eight years. Investors will want to know more about the company's plans to grow its business by expanding partnerships with cable service providers and developing cloud-based services. Separately, on the same day, wholesale distributor of technology products, Tech Data is expected to report its second-quarter earnings before markets open. Software maker Splunk is scheduled to report second-quarter results on Thursday. Investors will have to wait until the end of next week for Canada's main economic data event, when the gross domestic product report for the second quarter is released on Friday. Canada's economy slowed in the first quarter of the year, partly due to unusually severe winter weather in both the U.S. and Canada, and analysts are expecting to see a pick up to a 2.6 percent annualized rate in the second quarter. Data on the current account released on Thursday will also be watched, with economists forecasting the deficit will continue to narrow in the second quarter. The report will be parsed for what it shows about the performance of the country's export sector, which the central bank is hoping will become a bigger driver of growth. On Wednesday, Chinese solar company, Yingli Green Energy is expected to report a smaller loss for the fifth straight quarter as demand from China and Japan remains strong and panel prices improve globally. The company, whose panels powered the Maracana stadium in Brazil during the 2014 FIFA World Cup final, has been opening offices and winning customers in South America and Europe. Investors will want to know if new tariffs imposed by the United States will affect Yingli's U.S. market share, and if the company would consider moving its manufacturing base to other countries to bypass the tariff. Trina Solar, the Chinese solar company is expected to report its fourth straight quarterly profit on Tuesday, helped by strong demand from China and Japan and higher panel prices. The company is likely to be less affected by U.S. tariffs on Chinese and Taiwanese exports than its rivals as it will have to pay combined tariffs of 23 percent on products made in China, versus an average of about 31 percent for the industry. Rival JA Solar said earlier this month that it plans to set up manufacturing plants in North America next year to counter the duties. Investors will be looking to see if the lower tariff will help Trina raise its market share in the United States. There is robust demand for Chinese solar products in the United States, particularly from panel installers, as they are cheaper than locally produced panels. A report from the central bank will show whether Mexico's current account deficit continued to narrow in the second quarter, after reaching $4.53 billion in the first three months of the year. July trade balance data out on Wednesday will shed light on how factory exports fared, after they fell in June by the most since last December. Fiscal balance data for July will also be released on Friday. Monday Aug. 25 Premier, a collaborative healthcare alliance of about 2,900 United States community hospitals and 100,000 alternate sites, is scheduled to report fourth-quarter results after markets close. In April, the company acquired MEMdata LLC, an equipment planning, sourcing and analytics business focused on capital equipment needs for existing medical facilities, as well as those under construction. The Commerce Dept. is scheduled to issue single-family home sales for July which is expected to have dropped to 0.43 million. (1000/1400) Separately, the Federal Reserve Bank of Dallas is expected to issue its Texas Manufacturing Output Index for August. The prior reading was 12.70. (1030/1430) The United States-Chicago Fed National Activity Index for July is expected to be released. (0830/1230) Meanwhile, Markit's August composite PMI is likely to be released. (0945/1345) Hewlett-Packard and shareholder attorneys will attempt to persuade a U.S. judge to approve a settlement which absolves top HP executives of civil liability relating to the company's failed acquisition of Autonomy. As part of the settlement, HP will team up with shareholder attorneys to sue former Autonomy executives including Mike Lynch. Prospect Capital Corp, a financial services company that primarily lends to and invests in middle market privately-held companies is likely to report earnings for the fourth quarter. In August, the company sold its interests in AMU Holdings and Airmall to Fraport AG Frankfurt Airport Services Worldwide. Mexico's retail sales data for June is expected to be released. (0900/1300) Data will reveal whether retail sales continued to cool in June after dipping in May on a monthly basis. (Compiled By Nandi Kaul in Bangalore; Edited by Saumyadeb Chakrabarty)
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