What to Watch in the Week Ahead and on Monday, April 27
(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 Federal Open Market Committee begins on Tuesday a two-day meeting on interest rate policy. The Fed has already ruled out an April rate hike. So not much is expected from this meeting. Investors will watch for signs that the Fed is getting more comfortable with inflation data. A statement is scheduled for release on Wednesday at 1400 ET (1800 GMT).
Dow components reporting results in the week include Merck & Co Inc and Pfizer Inc on Tuesday, Visa Inc and Exxon Mobil Corp on Thursday and Chevron Corp on Friday. Lower first-quarter earnings are in store for Merck, as weak growth of its Januvia diabetes drug, the stronger dollar and generic competition for other drugs weigh on results. Pfizer is also expected to report lower first-quarter earnings, hurt by generic competition for its Celebrex painkiller and conclusion of a longtime co-promotion agreement that had allowed it to sell Amgen Inc's blockbuster Enbrel arthritis drug in the United States.
Visa, the world's No.1 debit and credit card company, is expected to post a slight fall in year-over-year profit for the second quarter, weighed down by a decline in U.S. spending activity in the quarter due to low gas prices, which accounts for about 7-8 percent of the its U.S. transaction volume. MasterCard Inc, second behind Visa, is expected to report a fall in first-quarter revenue on Wednesday, hurt by a stronger dollar and low gas prices. MasterCard gets about 60 percent of its payment volumes from outside the United States.
Data next week will likely show the U.S. economy slowed sharply in the first quarter. The Conference Board is expected to report on Tuesday that consumer confidence index rose to 102.5 in April from 101.3 in March. The same day, the S&P Case Shiller survey is expected to show house prices increased in 20 metropolitan areas in February. The Commerce Department is expected to report on Wednesday that gross domestic product increased at a 1.0 percent annual rate in the first quarter after expanding at a 2.2 percent pace in the fourth quarter. The National Association of Realtors is expected to report pending home sales rose 1.2 percent in March after rising 3.1 percent in February. Data from the Commerce Department is expected to show on Thursday consumer spending rose 0.5 percent in March after edging up 0.1 percent in February. The same day, the Labor Department is expected to report employment cost index rose 0.6 percent in the first quarter, maintaining the pace of the prior quarter. The Commerce Department is expected to report on Friday that construction spending rose 0.5 percent in March after slipping 0.1 percent in February. The Institute for Supply Management is expected to report that its national factory index rose to 52 in April from 51.5 in March. Automobile manufacturers are expected to report that sales moderated to a 16.9 million-unit rate in April after rising to a 17.15 million-unit rate in March.
Ford Motor Co will report results for the first quarter before the market opens on Tuesday. Analysts expect 27 cents a share, up slightly from a year earlier. Focus will be on the company's U.S. truck business, and its effort to narrow losses in Europe.
Time Warner Inc, which spun off its publishing business Time Inc last year, reports first-quarter results on Wednesday. Cable provider Time Warner Cable Inc is expected to report first-quarter revenue slightly below the average analysts' estimate on Thursday, according to Thomson Reuters StarMine data as it continues to lose residential video customers. The company and Comcast terminated their pending deal on April 24. Viacom Inc, the owner of cable networks MTV and Comedy Central and movie studio Paramount Pictures Corp, is expected to report second-quarter revenue and profit broadly in line with analysts' expectations on Thursday, according to Thomson Reuters StarMine data.
Twitter Inc is expected to report on Tuesday an 80 percent surge in first-quarter revenue as the ubiquitous online micro-blogging service manages to make more money from advertisers keen to reach its nearly 300 million users.
LinkedIn Corp, which operates a social network for professionals, is expected to report first-quarter results on Thursday that beats average analysts' estimate, according to Thomson Reuters StarMine data. Analysts expect LinkedIn's hiring business, which has been growing by nearly 50 percent in last three quarters, to remain the primary engine of growth by acquisition of new customers. Investors will be looking for second-quarter profit and revenue forecasts. Continued...