What to Watch in the Day Ahead - Thursday, Nov. 6
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The U.S. Labor Department releases labor costs and productivity data for the third quarter. With productivity likely to fall, unit labor costs - a key gauge of inflation and profit pressures - are likely to jump, although the year-on-year gain is likely to show the trend is still quite subdued (0830/1330). The department also releases its latest reading on jobless claims, which have been trending lower in a sign the labor market continues to gradually tighten (0830/1330).
Federal Reserve Bank of Chicago President Charles Evans gives welcome remarks before the "The New International Financial System: Analyzing the Cumulative Impact of Regulatory Reform" conference hosted by the Federal Reserve Bank of Chicago and the Bank of England, in Chicago (1040/1540). Also speaking at the conference is Federal Reserve Board Governor Powell (1330/1830). Separately, Federal Reserve Bank of Cleveland President Loretta Mester speaks on "Federal Reserve Communications and Forward Guidance" before the Money Marketeers of New York City (1915/0015).
"Guardians of the Galaxy", the highest-grossing movie of the year, is expected to boost fourth-quarter results for Dow component Walt Disney Co. Wall Street analysts on average expects the media and theme park giant to report earnings of 88 cents per share for the three months ended September, up from 77 cents a year earlier, according Thomson Reuters I/B/E/S. Satellite TV provider DirecTV is expected to report third-quarter earnings slightly below the average analysts' estimate, according to Thomson Reuters StarMine. DirecTV recently extended its exclusive contract to sell the Sunday Ticket package of National Football League games, effectively removing a roadblock to AT&T Inc's proposed $48.5 billion purchase of the company. Investors will watch for plans in Latin America, its largest growth area, after the completion of the merger as DirecTV was unwilling to explore opportunities in the region as a standalone company. AOL Inc CEO Tim Armstrong proved last quarter that his change of strategy to focus more on advertising technology appears to be working. The digital media and entertainment company is expected to report third-quarter profit above estimates, according to Thomson Reuters StarMine, helped by a growth in advertising revenue. The company is seeing advertising revenue fast replacing its earlier dial-up subscription service. Cable company Cablevision Systems Corp is likely to beat the analysts' average estimate when it reports third-quarter results, according to Thomson Reuters StarMine. Cablevision has been focusing on boosting its profit by raising prices and cutting expenses - moves that have come at a cost as subscribers switch to providers offering better deals. However, the company is likely to offset some the impact of a fall in the number of video customers by higher advertising revenue and cable subscription rates. Also reporting third-quarter results is cable TV network AMC Networks Inc. The company is expected to report quarterly revenue above the analysts' average estimate, according to Thomson Reuters StarMine. The company is expected to report revenue growth in its international business, helped by the acquisition of Chellomedia, the owner of TV channels such as Buzz, Canal A, Cosmopolitan. British drugmaker AstraZeneca Plc is expected to report a decent third quarter, helped by the delayed arrival of a generic copy of ulcer pill Nexium in the United States and the strong launch of new diabetes pill Farxiga, which should help CEO Pascal Soriot justify a go-it-alone strategy. Offshore drilling contractor Transocean Ltd is expected to post a lower third-quarter profit due to a fall in demand for its rigs as the market continues to be oversupplied. The recent slump in oil prices could hurt quarterly profit as oil and gas producers are likely to move further away from expensive offshore production. Investors will also look for comments on lower spending by customers in the coming months. Oil and gas company Apache Corp, in the midst of a plan to spin off or sell its international and LNG assets, is due to report third-quarter earnings ahead of a Nov. 20 meeting where it plans to provide a comprehensive overview of its operations. Drugmaker Hospira Inc is expected to report a lower third-quarter profit as its sedative, Precedex, faced greater-than-expected competition from generics. While Hospira appeals the FDA ruling of allowing generics in the market, its earnings report will give investors more insight into the impact of competition from generic drugmakers. The company also received an FDA warning letter earlier this month about one of its facilities in Australia and has been embroiled in a number of nation-wide recalls this year - issues which the management is expected to address. Nvidia Corp's third-quarter results may reflect how the PC chipmaker continues to struggle after getting squeezed out of the lucrative market for smartphone chips by much larger rival Qualcomm. Wall Street wants stronger evidence that their growth initiatives, centered around automobiles and ultra high-end graphics, are proceeding and contributing more to the bottom line. The Wendy's Co, the third-largest hamburger company in the United States, is expected to miss estimates for both third-quarter profit and revenue, according to Thomson Reuters StarMine. The fast-food chain is struggling amidst tough competition from rivals like McDonald's and Burger King. Wendy's is also expected to suffer from a fall in traffic to its U.S.-based Wendy's restaurants despite revamping its image with new menu and restaurant renovations. Molson Coors Brewing Co, which sells beers such as Coors Light, Molson Canadian, Carling, and Blue Moon, will report third-quarter results before the bell. The brewer has been helped by newer launches and higher growth in international markets, offsetting volume declines in the United States and Canada. It expects to spend higher on brand investments in the second half of this year. Skyworks Solutions Inc, which supplies radio frequency chips to Apple, is expected to report fourth-quarter results that confirm its estimate that adjusted profit and revenue would be above its forecast. Skyworks has been benefiting from higher demand from handset makers, particularly Apple. The company's upbeat estimates come at a time when investors are concerned about a broad-based downturn in the semiconductor industry due to lower demand for electronic devices. Auto parts maker Visteon Corp is expected to report a higher quarterly profit as global vehicle production rose 3 percent in the third quarter. Visteon's heating, ventilation and air conditioning for vehicles business, which accounts for more than two-thirds of its revenue, is expected to record higher sales in Europe and North America. Struggling Zynga Inc is expected to shed more light on what exactly it's pinning its future growth prospects on after Facebook, several rounds of debilitating layoffs, and a broad management reshuffle. When the company reports third-quarter results, investors will want to see new ideas, not Farmville XXVII. Also reporting third-quarter results is King Digital Entertainment. King, the once red-hot Candy Crush Saga developer whose growth seemed to have peaked earlier this year, will twin its quarterly report card with details of what it's got up its sleeve to replace the runaway smash that delivered its early growth. Online travel agency Orbitz Worldwide has benefited in the past year from higher U.S. leisure and business travel, which is being boosted by growing confidence in the U.S. economy. Analysts expect Orbitz to report third-quarter results similar to rival Expedia Inc and will be watching out for the company's estimate for global travel next year. Handbag and accessories maker Kate Spade & Co has been struggling to ease the pressure on its margins as competition stiffens and spending in North America weakens. When the company reports third-quarter results, investors will be looking for any commentary on margins and the promotional environment. They will also keep an eye out for comments on how the company is poised to perform in the holiday season. The European Central Bank meeting will be the main money event in Europe despite the fact that it is not likely to be one of action. As usual, the attention will be on ECB chief Mario Draghi's nuances at the news conference that follows the likely non-decision. The Bank of England looks also looks to keep interest rates on hold at record low levels after three of its most senior officials expressed staunch opposition to hiking rates in the last two weeks. The Brazilian central bank releases the minutes from its last rate-setting meeting, in which policymakers shocked investors with a rate hike. In the minutes, the bank will explain in more detail why it decided to raise rates three days after the re-election of President Dilma Rousseff and signal if more increases are in store. Many investors saw the surprise hike as a signal that Rousseff will adopt more market-friendly policies in a second term to regain markets' confidence. Separately, Mexico's monthly central bank survey of inflation and growth is scheduled for release. This closely watched survey of economists by the central bank sheds light on analysts' expectations for growth and inflation. (Compiled by Ayesha Sruti Ahmed in Bangalore; Editing by Savio D'Souza)
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