September 12, 2014 / 7:19 PM / in 4 years

What to Watch in the Week Ahead and on Monday, Sept. 15

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WEEK AHEAD The Federal Open Market Committee gathers on Tuesday and Wednesday, with Fed Chair Janet Yellen delivering a press conference after Wednesday’s FOMC policy statement. Federal Reserve officials will be updating their forecasts for the economy, including estimates for growth, unemployment, inflation and interest rates in 2017. With the Fed’s bond buying program set to wrap up next month, investors will scour the statement for any clues or any language that clarifies whether the central bank is any closer to raising interest rates for the first time in eight years. Some economists and Fed watchers predict a change to the rate guidance, which has been consistent since March. On Thursday, the Fed releases its quarterly flow of funds report. U.S. manufacturing and housing data next week will likely offer confirmation of sustained strength in the economy. Data from the Labor Department on Wednesday is expected to show consumer prices stayed flat in August due to weak gasoline prices. The core CPI, however, is forecast rising 0.2 percent, after edging up 0.1 percent in July. The Commerce Department is expected to report on Thursday a deceleration in housing starts. The pace is, however, expected to have remained above 1-million units. Chinese e-commerce giant Alibaba Group, one of the most anticipated IPOs since Facebook’s in 2012, will price its initial public offering on Thursday, which could raise more than $21 billion and become the largest-ever IPO in history. Oracle Corp on Thursday posts fiscal first-quarter results as investors look for faster progress against smaller rivals selling web-based services. The company’s results in the previous quarter disappointed Wall Street and cast doubt on Oracle’s execution in an industry facing increasingly tight competition. Federal Reserve Bank of Dallas President Richard Fisher hosts a dinner event on Thursday as part of a broader commemoration of 100 years of the Federal Reserve System. FedEx is expected to report a rise in first-quarter revenue and profit on Wednesday, helped by higher shipment volumes. The company, which gets 72 percent of its revenue from the U.S., is affected by customer demand for services based on macro-economic factors and economic growth. During the last two months, the U.S. GDP and retail/e-commerce sales - a reflection of consumer spending - grew at a higher rate, according to the Commerce Department. Also cost cutting initiatives undertaken in 2013 at its largest business, FedEx Express, are expected to boost profit. Investors will be looking out for an update on the 2015 forecast and shipping preparations for the upcoming holiday season. Photoshop maker Adobe Systems is likely to post third-quarter results on Tuesday that are in line with Wall Street’s estimates, according to StarMine. Analysts expect the company to report a rise in subscribers for its Creative Cloud and digital marketing software. Investors will watch for the outlook. ConAgra Foods is scheduled to report first-quarter results before markets open on Thursday. Analysts expect earnings of 35 cents per share. General Mills, which this month acquired organic food producer Annie’s, reports first-quarter earnings on Wednesday. It has been expanding its line of healthier foods, including making a protein-based granola bar, and struck a deal with McDonald’s to sell its Yoplait yogurt as part of the fast food chain’s Happy Meals. The Federal Communications Commission holds two public hearings on Tuesday as it weighs new so-called “net neutrality” rules that regulate how Internet service providers manage traffic on their networks and interact with content providers. The morning public hearing will focus on policy approaches to ensure an open Internet and the second on how mobile broadband should be treated by the rules. Lennar this year overtook PulteGroup to become the No. 2 U.S. homebuilder and has also performed better than D.R. Horton so far, boosted by a larger land bank in areas close to the city centers. But home prices are continuing to rise, while personal income is about stagnant. So, when Lennar reports third-quarter results on Wednesday, investors will focus on the company’s selling prices and strategy on discounts in the coming few quarters. Red Hat, the world’s largest commercial distributor of the Linux operating system, is likely to report better-than-expected second-quarter results on Thursday, according to StarMine. The company in June raised its full-year profit and revenue forecast citing improved IT spending. Business research provider IHS is likely to report better-than-expected third-quarter revenue on Thursday, according to StarMine, helped by strong subscription growth. IHS, whose businesses include Cambridge Energy Research Associates and technology market research firm iSuppli, said in June that strong profit growth and free cash flow had helped it reduce debt over the past year, putting it in a position to acquire companies in the second half of the year. Investors will have to wait until the end of the week for Canada’s main economic event, with the inflation report for August due to be released on Friday. The annualized inflation rate is forecast to hold steady at 2.1 percent, while core inflation - which strips out volatile items and is closely watched by the central bank - is expected to edge up to 1.8 percent. The Bank of Canada recently said the downside risks to inflation associated with a below-target starting point have diminished, though the central bank also sees the recent uptick in consumer prices as likely being temporary. Other economic data on tap next week include manufacturing sales, which are expected to rise to 0.8 percent for July, and wholesale trade, which is forecast to cool to a 0.4 percent gain in July. MONDAY, SEPTEMBER 15 The Federal Reserve is expected to report that industrial production increased 0.3 percent in August, with manufacturing output gaining 0.2 percent (0915/1315). The New York Fed is also expected to report that its business conditions index increased to 16 in September from 14.69 in August (0830/1230). Chinese e-commerce company Alibaba Group Holding hosts a group lunch in Hong Kong and in Singapore the following day, pitching its record IPO of as much as $24.3 billion to investors in Asia after a series of meetings in the United States. The Denver Gold Forum is one of the world’s pre-eminent gold industry conferences held annually in Colorado. This year it begins with registration and a welcome reception on Sunday and continues till Wednesday. Beginning Monday, dozens of gold mining companies will present at the show, including Barrick Gold, Goldcorp, Newmont and the big South African producers. The conference is by invitation only and is regarded as a venue where deals are often discussed behind closed doors. It is the last day that consumers, companies and advocacy groups can submit comments to the Federal Communications Commission on the controversial issue of net neutrality as the agency weighs new rules for how Internet providers manage traffic on their networks. The Canadian Real Estate Association is expected to release August data for existing home sales. Sales of existing homes in Canada rose by 0.8 percent in July. Brazil’s central bank releases results of a weekly economic survey of more than 100 financial institutions that will include forecasts for GDP, interest rates and inflation rates. Separately, Peru’s statistics agency announces the economic growth rate for July. The economy grew just 0.3 percent in June on the year, well below market expectations of 1.5 percent. The finance minister has said that June was likely the lowest point for growth this year and that in the second half of 2014, the economy will recover from its slowest expansion in nearly five years (1000/1400). (All analysts’ estimates are according to Thomson Reuters I/B/E/S/) (Compiled by Ayesha Sruti Ahmed in Bangalore; Editing by Savio D’Souza)

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