What to Watch in the Day Ahead - Tuesday, Jan 26
(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) Federal Open Market Committee's two-day meeting on interest rate policy begins in Washington amid the snowstorm cleanup. Separately, reports are likely to show solid gains in house prices in November, with the S&P/Case Shiller house price index expected to have risen 5.7 percent year-over-year in November, compared with 5.5 percent in the year to October. (0900/1400) The Conference Board is expected to report its consumer confidence index at an unchanged 96.5 in January despite a massive stock market selloff. (1000/1500) Apple Inc is expected to report revenue slightly below market expectations for the first time in six quarters, according to Thomson Reuters StarMine. The world's largest company by market value has been facing well-documented issues around softer demand for iPhone 6 and iPhone 6S. Warnings from Apple suppliers such as Cirrus Logic, Jabil Circuit and Qorvo have sparked concerns about slowing shipments. Investors will be looking for clarity around reports that the company will cut output of the iPhone models by about 30 percent for the March quarter. Chief Executive Tim Cook's comments about China, which the company counts as one its biggest markets, will also be on focus. Johnson & Johnson is expected to report lower fourth-quarter revenue, hurt by a stronger dollar. Weak sales of medical devices and consumer products are expected to have weighed on results. The company recently said it would cut 3,000 jobs over the next two years in its struggling medical devices business, with the hope of achieving up to $1 billion in annual cost savings. AT&T, the No. 2 U.S. wireless carrier and the world's largest pay-TV operator, is expected to report fourth-quarter earnings slightly above analysts average estimate, according to Thomson Reuters StarMine. As the U.S. wireless market stagnates, AT&T is seeking new revenue streams and betting on DirecTV's satellite TV business to help beef up its bundles of cellular, broadband, TV and fixed-line phone services. Investors will focus on its 2016 forecast and the progress on the integration of DirecTV, which it acquired in July. Chemical company Dupont, which is merging with rival Dow Chemical, is expected to report a fall in fourth-quarter profit, hurt by weak earnings from its farm segment. Falling prices for seeds, especially corn, has weighed on the business for more than a year now. Investors will be keen to learn more about the company's outlook for its agriculture business and non-farm demand from China. Details about the pending merger and the impact of a strengthening dollar will also be on agenda. Procter & Gamble Co is expected to report second-quarter sales above analysts average estimate, according to Thomson Reuters StarMine. A stronger dollar has crimped the value of sales from overseas markets. The company missed out on key trends in important markets like China and India due to a very centralized organizational structure. P&G has been shrinking its product portfolio to concentrate on higher-margin brands, a move that analysts and investors have lauded. The company said it expected organic sales to grow from the latest quarter. Also hurt by a strong dollar and a global economic slowdown, 3M Co is expected to report lower fourth-quarter revenue. The maker of Scotch tape and Post-it notes, which gets more than 60 percent of revenue from outside the United States, had cut its 2015 profit outlook in December, and forecast 2016 earnings below the average analyst estimate. AIG is under tremendous pressure from shareholders, including activist investor Carl Icahn, to address concerns about its structure, leadership and cost management as rock-bottom insurance rates batter its underwriting operations. The No. 1 U.S. commercial insurer's strategic update comes amid mounting tensions between Chief Executive Peter Hancock and Icahn over the billionaire's suggestion in October that AIG should split into three - an idea Hancock promptly rebuffed. AIG's last strategic announcement in December saw four top-level executives, including its CFO, leaving the company - a move some analysts think was in response to Icahn's criticisms. Lockheed Martin, the Pentagon's No. 1 supplier, is expected to report slightly lower fourth-quarter earnings and revenue. The company is likely to announce plans to merge a large share of its government services business with that of Leidos, creating the largest U.S. government services company. Corning Inc, which supplies Gorilla Glass for Apple iPhones, is likely to report fourth-quarter revenue slightly below analysts average estimate. The company could take a hit from the weakening global economy and a strong dollar. While Corning is best known for the hardy scratch-resistant Gorilla Glass used in smartphones, a majority of its revenue comes from making LCDs and other displays for TVs. Software maker VMware Inc is expected to post fourth-quarter profit and revenue in line with market estimates, according to Thomson Reuters StarMine. The company which makes cloud and virtualization software, lowered its revenue forecast and had warned in October that it would take a hit by softer bookings due to weak demand from China, Russia and Brazil. Investors will watch out for updates on company's 2016 outlook and how VMware will be structured within parent EMC following Dell's purchase of EMC. Wireless carrier Sprint Corp is expected to report third-quarter profit and revenue below analysts average expectations, according to Thomson Reuters StarMine. Sprint has been burning cash to lure subscribers away from its rivals. The company launched a plan in November under which customers who switched from Verizon, AT&T and T-Mobile would pay only half of what they paid for their existing plans. In November, Sprint also announced plans to slash expenses by as much as $2.5 billion in fiscal 2016, to end six straight years of losses. The company expects to report an operating loss in 2015. Investors will be looking for effects of cost cutting on the earnings. Coach Inc is expected to report second-quarter sales above analysts average estimate, according to Thomson Reuters StarMine. The handbag maker has been revamping its products under design chief Stuart Vevers, a move that helped the company beat the odds in a dull market for handbags last quarter. Analysts have lauded Coach's strategies, which included a reduction in promotional cadence in an over-distributed market. A Cowen-Sahler research showed Coach was the most favored brand in the handbag market, even though overall sales growth continues to be subdued. U.S. diversified miner and oil producer Freeport-McMoRan is expected to post a fourth-quarter loss, hurt by weakening metals and oil prices. Freeport has had a turbulent quarter, during which co-founder James Moffett stepped down and the company suspended its annual dividend and lowered its capital spending. The company came under the scrutiny of activist investor Carl Icahn last August, who criticized the company's spending and capital structure in light of its massive debt. Investors will be looking at Freeport's ability to raise funds through the potential sale of a minority interest in certain mining assets, even as uncertainty hovers over its plan to divest its Indonesian unit. Canadian National Railway Company is expected to announce an improved operating ratio in its fourth-quarter results. Canada's largest rail company is likely to have benefited from cheaper oil and the weakening Canadian dollar, despite lackluster volumes due to lower bulk shipments. Mexico's retail sales likely rose 0.10 percent in November, in comparison to October's 0.3 percent rise, while sales probably edged up 5 percent in November on a year-over-year basis. (0900/1400) LIVECHAT-FOREX WATCH with Scotiabank chief FX strategist Shaun Osborne Shaun Osborne comes to the forum to chat about America's new rates regime, risks from a slowing global economy, oil's markets-rattling price plunge and other forces shaping currency values. (1000 ET/1500 GMT) To join the Global Markets Forum, click here bit.ly/1kTxdKD (Compiled by Astha Rawat in Bengaluru; Editing by Savio D'Souza)
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