What to Watch in the Week Ahead and on Monday, Mar. 2
(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
Markets will be squarely focused on data, including private-sector employment figures, factory survey data, and the big report of them all, February's jobs figures. The bond market has been swaying back and forth on each bit of economic data, but believes a rate increase isn't likely until September. Expectations for more aggressive Fed policy have favored the dollar, and clarity on other central banks will come with meetings of the ECB and Bank of England next week. Investors are starting to become concerned with the rise in the equity market as the Nasdaq knocks on 5,000.
U.S. Federal Reserve releases results of its annual bank 'stress test' health check on Thursday. The U.S. Federal Reserve measures how banks hold up in a hypothetical next crisis in a series of economic simulations. Banks need to keep their top-tier capital above 5 percent in a simulated severe crisis. The tests are followed a week later by a more high-profile exercise that says whether the banks can execute planned shareholder returns such as dividends and share buybacks.
On Tuesday, the U.S. auto industry is scheduled to report February sales and analysts expect the industry to maintain its strong pace despite the snow and cold weather in large parts of the country. Analysts expect the automakers to report an annual sales rate in the month of 16.6 million to 16.7 million vehicles, which would match the rate from January and continue the industry's hot streak since February 2014. It would mark the 12th straight months of a sales rate above 16 million. So far, many automakers have been able to raise prices faster than incentives they offer consumers, and investors will be looking to see if that remains the case. (1330/1830)
On Thursday, warehouse club operator Costco Wholesale Corp is likely to report second-quarter profit below analysts' average estimate, according to Thomson Reuters StarMine data. The company reported an 8 percent rise in December same-store sales. American Express said in February its credit cards will not be accepted at Costco's U.S. stores from next year. Investors will be looking for Costco's comments on this, and who could be its new card partner. Also, any comments on Wal-Mart's decision to increase minimum wage would be of interest.
No. 1 office supplies retailer Staples Inc's fourth-quarter sales are expected to benefit from a rise in demand for copy and print products in North America. Staples' quarterly sales are expected to beat analysts' estimates, according to Thomson Reuters StarMine data. The company is acquiring smaller rival Office Depot Inc for about $6.3 billion in cash and stock to better compete against online retailers such as Amazon.com. Staples is expected to file a registration statement with the SEC soon that may give an update about its talks with the FTC about possible store divestitures required to seal the deal. On Friday, investors will be watching out for the company's full-year forecast and any regulatory comments regarding the acquisition.
AutoZone Inc, the No.2 U.S. auto parts retailer by market cap, is likely to report better-than-expected second-quarter results on Tuesday, as lower oil prices that put more disposable income in the hands of customers likely pushed up sales at its Do-It-Yourself business. The company has, however, lagged its peers in its commercial/do-it-for-me business and investors will be looking out for comments on how the company hopes to catch up. AutoZone, which has about 8 percent of its total stores outside the U.S., is also less likely to be hit by a strong dollar.
On Tuesday, Federal Reserve Chair Janet Yellen speaks on "Bank Regulation and Supervision" and receives Citizens Budget Commission Medal for High Civic Service and speaks at award dinner, in New York. (2000/0100) Meanwhile, Federal Reserve Bank of Chicago President Charles Evans speaks on current economic conditions and monetary policy on Wednesday. (0900 /1400) Federal Reserve Bank of Kansas City President Esther George speaks on the U.S. economy on the same day. On Thursday, Federal Reserve Bank of San Francisco President John Williams speaks on the economic outlook before the CFA Society Hawaii 10th Annual Economic Forecast Dinner. (2315 /0415)
Abercrombie & Fitch Co, the struggling teen apparel retailer, is expected to report revenue for the fourth quarter on Wednesday that is expected to miss analysts' average estimate, according to Thomson Reuters StarMine data. The strong dollar, low demand for Hollister and Abercrombie & Fitch clothes and margin declines due to heavy discounting during the holiday season are expected to weigh on profits for the quarter too. Abercrombie has been trying to revive sales by improving its merchandise and speeding up the supply chain to respond quicker to fashion trends, but consumers' preference for cheaper fast-fashion brands, and clothes that do not feature heavy company branding is hindering the company's efforts. Investors will be looking for 2015 forecast, progress on its efforts to find a new CEO and business strategy going forward this year. Continued...