July 24, 2015 / 7:59 PM / in 2 years

What to Watch in the Week Ahead and on Monday, July 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

Markets next week will be dominated by earnings, as big oil, healthcare and several notable social media names lead the pack in what has so far been a middling earnings season, save for some giants that have far exceeded expectations. Facebook, Exxon Mobil and Pfizer are all on the docket. The market will also gravitate to the Federal Reserve’s two-day meeting, the last before September, which still looms as the first possibility for an interest-rate increase from the Fed.

Facebook Inc is expected to grow revenue, excluding the impact of a strong dollar, according to Wall Street analysts. Analysts expect the company’s ongoing traction with various segments of advertisers to help Facebook capturing a growing share of digital advertising budgets. When it posts its second-quarter results on Wednesday, investors will keep a close watch on costs and whether the company can keep up growth in monthly active users. Twitter Inc, which has been struggling with slowing user growth, is expected to report second-quarter revenue on Tuesday, below analysts’ expectations, according to Thomson Reuters StarMine. Investors will look for commentary on the progress in the direct response ads. They will also be on the lookout for updates on the ongoing CEO search and the impact of a strong dollar. On Thursday, professional social network LinkedIn Corp is expected to report second-quarter revenue slightly above average analyst estimate, according to Thomson Reuters StarMine. Investors will keep a close watch on the company’s hiring business, in which revenue growth slowed to 36 percent in the first quarter.

Exxon Mobil Corp, the world’s biggest listed oil company, and its U.S. peer, Chevron Corp, are scheduled to post second-quarter earnings on Friday. The world’s top oil companies are set to report yet another sharp drop in quarterly profits that could force more spending cuts due to a dim outlook for oil prices.

Procter & Gamble Co and Colgate-Palmolive Co, the two U.S. personal care products companies with big operations outside the United States, have been working to reduce the impact of a stronger dollar on sales. While Colgate has raised prices in emerging markets, P&G is setting up manufacturing plants there to localize supply chain activities. When Colgate reports its second-quarter results and P&G its fourth quarter on Thursday, they are expected to beat analysts’ estimates on revenue, but miss on profit, according to Thomson Reuters StarMine. Investors will be keen on any forecast updates and changes in strategy.

Thursday’s data will show the U.S. economy is likely to have expanded at a much faster pace in the second quarter. The gross domestic product is projected to have risen at a 2.6 percent annual rate in the April-June quarter, compared to a contraction of 0.2 percent annual rate in the January-March quarter. Separately, the Labor Department issues Employment Cost Index on Friday. On the same day, the University of Michigan’s final July reading on the overall index on consumer sentiment is expected to come in at 94.0, a bit higher from a preliminary reading of 93.3. On Tuesday, financial firm Markit will release its preliminary reading of Purchasing Managers Index for the services sector, which is expected to increase to 55.0 from 54.8 in June. Pending Home Sales Index on Wednesday forecast to have risen 1.0 percent, compared to June’s 0.9 percent increase.

Mastercard Inc is scheduled to post second-quarter results on Wednesday. A strong dollar is expected to hurt the world’s No.2 debit and credit card company, which gets 60 percent of its payment volumes from outside the United States. About 10 percent of transactions made using the company’s plastic are on gasoline, according to analysts, and the low oil prices remain a drag on Mastercard’s earnings. Arch rival Visa is in talks to buy Visa Europe, which could mean a more powerful threat in Europe, where Mastercard has a strong presence. The company is expected to report second-quarter earnings in line with analysts’ expectations, according to Thomson Reuters StarMine.

On Tuesday, Merck & Co, the No. 2 U.S. drugmaker, is expected to report lower sales for the second quarter, hurt by the stronger dollar and divestiture of its consumer care business. On the same day, Pfizer Inc, which captures 60 percent of its revenue from abroad, is expected to report lower second-quarter earnings as the stronger dollar hurts sales outside the United States.

Amgen Inc is expected to report higher second-quarter sales and profit and may revise its full-year forecasts on Thursday. Investors will be looking for details on the company’s plans for the launch of its just approved injectable cholesterol treatment in Europe, as well as its expectations for likely U.S. approval and launch in the coming weeks. Biotechnology company Vertex Pharmaceuticals Inc is expected to report lower-than-expected second-quarter earnings, according to Thomson Reuters StarMine. Vertex was the first to develop a drug to treat the underlying cause of a rare lung scarring disorder called cystic fibrosis (CF). On Wednesday, investors will be looking to see how well the company is faring following the approval of Vertex’s latest CF drug, which allows the drugmaker to address a population of 8,500 patients, up from 2,000.

Anthem Inc, which agreed to buy smaller rival Cigna recently, announces second-quarter earnings on Wednesday. It is expected to report a higher profit, but all ears will be on any signs that medical costs are a problem and any further commentary on its $54-billion deal for Cigna. Cigna Corp reports a second-quarter profit on Thursday that is expected to be higher. On Wednesday, Humana Inc, which has recently agreed to be bought by Aetna, posts its second-quarter earnings. The company warned of its weaker outlook for 2015 already due to higher medical costs in Medicare Advantage customers, and analysts have lowered their expectations for the quarter. On Tuesday, health insurer Centene Corp is likely to report a better-than-expected second-quarter profit, according to Thomson Reuters StarMine.

On Tuesday, chemicals company DuPont Co is expected to report a lower second-quarter profit, hurt by a fall in agriculture earnings and a stronger dollar. DuPont derives about 60 percent of its sales from outside North America. The company in May defeated a campaign by Trian to land seats on DuPont’s board, delivering a landmark setback to one of the most influential activist investor firms. The company has moved its focus to its agri business, but seed sales have been weighed down by a switch to soybean from corn in North America. Corn seed sales account for about half of the sales from the agricultural products unit, the company’s largest.

Ford Motor Co is scheduled to post second-quarter earnings on Tuesday. Recently, Ford had announced that it is looking to a raft of new sedan and SUV launches in China later this year to regain momentum in the world’s largest auto market, after its sales barely grew in the first half of 2015.

Canadian plane and train manufacturer Bombardier Inc reports its financial results for the second quarter on Thursday. Analysts and investors may be looking for news on the Global 7000/8000, its newest business jets, which are scheduled to go into service in 2016 and 2017 respectively. Separately, Textron Inc, the maker of Beechcraft and Cessna aircraft, announces second-quarter results on Tuesday. The company is expected to benefit from burgeoning international demand, especially in its commercial market.

Video game publisher Electronic Arts Inc reports first-quarter results on Thursday. The company is expected to report a quarterly profit above estimates, according to Thomson Reuters StarMine. EA is expected to benefit from its fast-growing digital business, which includes software distributed through the Internet. Investors, analysts and gamers alike will be looking any details on the company’s biggest release of the year, “Star Wars Battlefront”, which comes out in mid-November before the new “Star Wars” movie.

Satellite-TV provider DirecTV is expected to report second-quarter earnings slightly below analysts’ average estimate, according to Thomson Reuters StarMine. When it reports on Thursday, all eyes will be on AT&T’s $48.5 billion merger with DirecTV that is expected to close soon as U.S. telecom and antitrust regulators signaled a green light for the merger.

On Thursday, wireless chip maker Broadcom Corp is expected to report better-than-expected second-quarter profit and revenue, according to Thomson Reuters StarMine. The company has been benefiting from strong demand for Apple’s iPhone 6 and Samsung Electronics’ Galaxy S6. Investors will look for details on whether the company’s exit from the baseband chips business is creating competitive disadvantage due to the lack of a 4G product.

On Thursday, cable provider Time Warner Cable Inc, which is being bought by Charter Communications, is expected to report second-quarter revenue slightly below the average analyst estimate, according to Thomson Reuters StarMine. Last quarter, the company added 30,000 residential video customers, its first increase since 2009 and well above analysts’ average estimate, indicating a turnaround for the company. Analysts are looking for any update on the deal, future investments and guidance.

On Thursday, T-Mobile US Inc, the No. 4 U.S. wireless carrier, is expected to report second-quarter revenue ahead of analysts’ average estimate, according to Thomson Reuters StarMine, helped by customer wins that are drawn to its low-cost plans. The company’s profit, however, is expected to take a hit, hurt by costs related to aggressive marketing campaign.

On Tuesday, specialty glass maker Corning Inc is expected to report second-quarter revenue below analysts’ expectations, according to StarMine data. Analysts expect display glass demand to be hurt by weak sales of personal computers and lower TV sales due to instability in China, which accounts for a quarter of global TV demand. Investors will look to see if adoption of 4K TV and continued demand for Gorilla glass can make up for the weakness.

Microsoft Corp, the world’s largest software company, releases Windows 10 on Wednesday. Windows 10 is the latest version of its venerable operating system which is fighting for relevance in a new mobile-computing world dominated by Apple and Google.

U.S. pipeline company Williams Companies Inc, which is in the middle of a takeover battle with Energy Transfer Equity LP, is expected to report a higher profit for the second quarter on Wednesday. The focus with the quarter will be on Energy Transfer’s offer. Energy Transfer said this month it would take any steps necessary to acquire Williams, after the company rebuffed the offer and said it was it was exploring strategic options.

Mondelez International Inc, the maker of Cadbury chocolate and Oreo cookies, is likely to report second-quarter sales below analysts’ estimates, according to Thomson Reuters StarMine. The company has been grappling with volatility in markets such as Europe, where sales have fallen for the last three quarters. Investors will look for updates on the company’s discussion with Wal-Mart to “revisit” the strategy change, market conditions in Europe and progress on the sale of its French coffee brand, Carte Noir, when it reports on Thursday.

D.R. Horton Inc, the largest U.S. homebuilder, is expected to report higher revenue and profit for the third quarter on Tuesday as it sold more homes at higher prices. Investors will be looking out for an update on its full-year financial forecast.

The friendly pursuit by Canada’s Potash Corp of Saskatchewan Inc of German rival K+S tops the interest of investors and analysts in the fertilizer sector, and Potash CEO Jochen Tilk will be asked about his next move toward a potential $8-billion deal when the company announces its second-quarter results on Thursday.

On Thursday, CME Group Inc reports second-quarter earnings, weeks after closing its open-outcry futures trading pits because of the shift of volume to computers.

Sirius XM Holdings Inc announces second-quarter results on Tuesday. The company is expected to report robust customer wins for its satellite radio service through the year, helped by strong U.S. auto sales. People who buy new cars fitted with Sirius receivers usually get free access for a few months, but must pay a fee to continue the service. In April, the company raised its revenue and subscriber addition forecast for the full year.

Akamai Technologies Inc, whose service helps speed up delivery of online content, is expected to report second-quarter revenue and profit marginally above estimates, according to Thomson Reuters StarMine. However, when it reports its results on Tuesday, the company’s revenue is expected to take a hit from a stronger dollar, as it rakes in about a quarter of its revenue from outside the United States.

Western Digital Corp, the world’s No. 1 hard-disk drive maker, on Wednesday is expected to report fourth-quarter profit below estimates, according to Thomson Reuters StarMine, as the company has been facing slower growth in its cloud business, and lower demand from its enterprise customers.

On Wednesday, Hilton Worldwide Holdings Inc, the owner of Waldorf Astoria and Conrad brands of hotels, is expected to report second-quarter revenue above analysts’ estimates, according to Thomson Reuters StarMine. With hotel occupancy in the United States reaching record heights, analysts expect a spike in average room rates, boosting revenue. Starwood Hotels & Resorts Worldwide Inc is expected to post second-quarter profit and revenue below estimates, according to Thomson Reuters StarMine. Investors will be looking for updates on strategic and financial alternatives announcement made last quarter, when it reports on Thursday.

On Thursday, U.S. refiner Marathon Petroleum Corp is expected to report a higher second-quarter profit, helped by strong profit margins. Gasoline crack spreads - the difference between crude oil and gasoline prices- have risen on weak crude prices and robust gasoline demand. Investors will look for details on the company’s expectations for the natural gas processing business. On the same day, Valero Energy Corp is expected to report a rise in quarterly profit, helped by robust gasoline demand and a steep fall in oil prices.

Royal Caribbean Cruises Ltd reports second-quarter earnings on Friday. The world’s second-largest cruise operator is expected to report quarterly profit and sales below analysts’ estimates, according to Thomson Reuters StarMine, hurt by higher fuel costs and a strong dollar. Increased promotional and marketing spending is likely to negatively impact margins as well. However, the company is likely to benefit from its partnership with online travel company Ctrip, which could lead to an increase revenue from the Asia-Pacific.

Yelp Inc, the operator of consumer review website yelp.com, is expected to report a second-quarter profit below the average analyst estimate, according to Thomson Reuters StarMine data. When it reports on Tuesday, investors will be looking for an update whether changes to Google’s search algorithm have negatively affected Yelp’s traffic.

On Tuesday, IAC/InterActive Corp, the owner of matchmaking services Tinder and Match.com, is set to report a second-quarter profit above Wall Street expectations, according to Thomson Reuters StarMine. IAC, which announced plans to list part of its profitable Match Group dating business, is expected to benefit from growth in dating subscribers and revenue from its Vimeo video service.

On Wednesday, Shutterfly Inc, the online photo-sharing company is expected to post a second-quarter profit slightly above the average analyst estimate, according to Thomson Reuters StarMine. Shutterfly is expected to benefit from a jump in the number of customers using its service. On the same day, Canadian business software maker Open Text Corp is expected to report a lower profit for the fourth quarter. The company said in May it anticipates a negative impact from a strong dollar in the quarter.

Ally Financial Inc reports second-quarter earnings on Tuesday. The largest U.S. auto lender is expected to report a quarterly profit, helped by higher U.S. auto loans originations. General Motors replaced Ally with its current in-house financing arm, General Motors Financial, for subsidized leases on Buick, GMC and Cadillac vehicles, beginning in February. Ally, which also lost exclusive agreements over the past two years with Chrysler, has been working to increase its market share among other brands such as Ford Motor and Nissan Motor. Ally also became the preferred financing source for Mitsubishi Motors in the United States, replacing the Japanese carmaker’s captive finance company in April.

Cybersecurity firm FireEye Inc will report second-quarter results after the market closes on Thursday. The company has benefited from governments and businesses ramping up spending to protect their networks from increasingly sophisticated attacks. Investors will look for signs of higher demand and updates on sales of its on-premise equipment.

Rockwell Automation Inc, which makes automation systems that help factories run smoothly, is expected to post a higher profit for the third quarter on Wednesday, helped by lower costs. However, revenue is expected to decline, hurt by a strong dollar.

The Western Union Co reports second-quarter earnings on Thursday. The world’s largest money-transfer company is expected to report a quarterly profit, helped by higher fees from its money-transfer services. Western Union is expected to face stiff competition from digital payment processor PayPal, spun off from eBay, after its acquisition of digital money transfer company Xoom.

Goodyear Tire & Rubber Co announces second-quarter results on Wednesday. The largest U.S. tiremaker has been cutting costs to shrug off effects of a 9 percent rise in the dollar in the first three months of the year that reduced revenues at almost all U.S. companies with international exposure. Investors will be looking for updates on how the currency is expected to impact results in the rest of the year, given that the dollar fell 3 percent in the three months ended June.

National-Oilwell Varco Inc posts second-quarter results on Tuesday. The largest U.S. oilfield equipment maker is expected to report a lower quarterly profit as a steep decline in commodity prices weighs on demand. National Oilwell has expressed interest in drilling assets being marketed by Halliburton. Halliburton may put up other assets on the block to gain regulatory compliance of its deal with Baker Hughes. Investors will want to know if National Oilwell can snap up any of these assets.

On Friday, Imperial Oil Ltd, Canada’s No.2 integrated oil producer and refiner, is expected to report a fall in second-quarter profit, hurt by a fall in crude oil prices. The company has said that it would maintain a cautious spending outlook in the months ahead. Investors will look for any commentary on cost reductions. On Tuesday, Husky Energy Inc is expected to report a big drop in quarterly profit due to an oil price slump. On the same day, Consol Energy Inc is likely post a loss in the second quarter due to weak commodity prices. On Thursday, Cenovus Energy Inc is expected to report sharply lower second-quarter profit. The company has said it plans to use the proceeds for other growth projects. Investors will look for details on investments and cost-cutting measures.

Willis Group Holdings Plc, the world’s oldest insurance broker, is expected to report a rise in second-quarter earnings on Tuesday, but some analysts are wary of the impact of the significant offshoring the company has quietly begun. Willis, like some of its rivals, has been moving to grow its share of the lucrative benefits insurance market, and agreed last month to an $18 billion merger with human resources consultancy Towers Watson.

On Wednesday, USA Today publisher Gannett Co Inc is expected to report third-quarter revenue, its first results after the spin-off of Tegna, in line with analysts’ estimates, according to Thomson Reuters StarMine. Analysts are looking for guidance for the new company and new investments it plans to make.

On Tuesday, Ingersoll Rand Plc, the maker of heating and air conditioning systems, is expected to report second-quarter revenue above estimates, according to Thomson Reuters StarMine. The company’s industrial business, which mainly receives revenue from outside the United States, has been impacted by the strong dollar. Investors will be interested to see if the growth in construction and industrial markets will boost profits.

Spirit Aerosystems Holdings Inc, the maker of fuselages for Boeing and Airbus, is expected to benefit from rising demand for fuel-efficient aircraft and commercial planes. Investors will look for comments from Spirit Aero on Boeing’s deferred costs on its 787 program, when it announces second-quarter earnings on Wednesday.

On Tuesday, solar panel maker SunPower Corp is expected to report a much higher second-quarter profit, helped by stronger demand from utilities and lower costs. The focus this quarter will be on the company’s forecast.

Friday’s data will show the Canadian gross domestic product is likely to remain unchanged in May after an unexpected contraction in April. Separately, June producer prices are expected to have increased by 0.5 percent from the previous month.

ON MONDAY, JULY 27

The U.S. Commerce Department releases data for non-defense capital goods orders, excluding aircraft. A closely watched proxy for business spending plans is expected to have risen 0.4 percent in June.

Restaurant Brands International Inc, the company formed out of Burger King’s takeover of Tim Hortons, is expected to report a higher second-quarter profit, helped by higher sales from its new and popular menu items. The company had launched dark roast coffee and crispy chicken club sandwich at Tim Hortons stores and spicy BLT whopper sandwich at Burger King. Investors will look for comments on the company’s expansion plans and its efforts to lure in more customers.

The head of Toyota’s Scion brand, Doug Murtha, will discuss the Japanese automaker’s future plans for the youth brand, which has had a spotty performance due to lack of product. The company in the past has weighed repositioning Scion as a line of premium small cars or adding a crossover or four-door sedan to the lineup. (Compiled by Nivedita Balu; Edited by Maju Samuel)

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