June 6, 2014 / 7:41 PM / 4 years ago

What to Watch in the Week Ahead and on Monday, June 9

(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 When all else fails, bond and stock markets seem to want to move higher. The S&P 500 has 2000 in its sights - a mere 2.5 percent gain away - and with little economic news and no earnings to speak of, the ongoing trend should keep the stock market in a buoyant mood, even if it’s a slow, steady grind higher. Bond yields remain under pressure, owing to big demand from all sorts of funds, lack of supply and a residual reaction from the European Central Bank’s big monetary policy move in this past week. It puts both markets in a bit of a Goldilocks scenario right now. Volumes will remain subdued as the seasonally slow summer period approaches. Retail sales data next week will likely cement expectations of a sharp rebound in economic growth. The Commerce Department is expected to report on Thursday that retail sales rose a solid 0.6 percent in May after gaining 0.1 percent in April. Core retail sales are forecast bouncing back 0.4 percent after slipping 0.1 percent in April. Producer prices data on Friday is expected to show inflation at the factory gate cooling. The producer price index for final demand is forecast rising 0.1 percent after accelerating 0.6 percent in April. Excluding food and energy, the index is seen edging up 0.1 percent after rising 0.5 percent in April. Canadian yogawear retailer Lululemon is expected to report steady first-quarter earnings and slightly higher revenue on Thursday. Investors are likely keen to hear the company’s mid- to long-term outlook. The results come as the trendy retailer struggles to move past a high-profile recall of overly sheer yoga pants more than a year ago and the subsequent fallout that resulted. Oil and natural gas company Memorial Resource Development is expected to raise about $648 million on Friday by offering 36 million shares at $16-$18 per share. At the top end of its expected price range, Memorial Resource would be valued at about $3.5 billion. Spanish renewable energy and engineering firm Abengoa’s U.S. subsidiary, Abengoa Yield, is expected to raise as much as $624 million on Friday by offering 23.1 million shares at $25-$27 per share. At the top end of its expected price range, Abengoa Yield would be valued at about $2.2 billion. Bain Capital-backed plastics maker Trinseo SA’s initial public offering on Thursday is expected to raise about $190 million, valuing the company at up to $900 million. Trinseo, formerly Styron Corp, was bought by Bain from Dow Chemical Co in 2010. The company derives majority of its revenue from Europe and competes with specialty chemical companies such as BASF, Zeon and Wacker Chemie AG. Mobile security provider MobileIron’s initial public offering on Thursday is expected to raise about $110 million, valuing the company at up to $747 million. MobileIron helps corporations manage and protect data that employees access on personal smartphones and tablets, a market once held closely by BlackBerry. Chinese jobs website operator Zhaopin is expected to raise about $81 million in its initial public offering on Friday. The company is selling about 5.61 million American Depositary Shares and the price range is expected to be $12.50-$14.50 per ADS. Data from Mexico on Tuesday will reveal whether gross fixed investment in the country picked up in March, after expanding 1.4 percent in February. ANTAD retail sales data out the same day will shed light on whether same-store sales rose in May, after increasing 2.4 percent in April. April industrial production numbers due on Wednesday will show whether March’s contraction of 0.13 percent boded for further deceleration in the sector. MONDAY, JUNE 9 Remarks from the dovish chief of the Boston Fed, Eric Rosengren, and the unpredictable but somewhat hawkish head of the St Louis Fed, James Bullard, will be the focus of Federal Reserve watchers this week. Neither Rosengren nor Bullard is a voter on the Fed’s policy-setting panel this year, but their comments are sure to be parsed carefully for any hint of a change in the Fed’s policy outlook after a government report showed strong job gains in May. Most observers believe the Fed is on course to end its bond-buying before the end of the year and to raise rates sometime in 2015. The Fed’s self-imposed communications blackout ahead of its June 17-18 meeting begins on Tuesday. The Canada Mortgage and Housing Corp is scheduled to report data for new home construction for May. The seasonally adjusted annualized rate of housing starts rose to 194,809 last month. (0815/1215) Economic data from Mexico is expected to show whether inflation continued to dip in May, from the six-month low of 3.5 percent reached in April. (0900/1300) (Compiled by Sourav Bose in Bangalore)

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