August 21, 2015 / 7:03 PM / 3 years ago

What to Watch in the Week Ahead and on Monday, Aug. 24

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Equities could remain under pressure if turbulence in China's stock market continues to stoke
worries about the global growth picture. After breaking through July lows on Thursday, support
on the S&P 500 is now being looked at around the January lows in the 1,980 to 2,000 range, at
which point stocks may be primed for a bounce. Any further attempts by the world's
second-largest economy to devalue the yuan could also bring more pain for emerging markets and
their currencies. Next week's economic data, including the second reading on GDP and more data
on the housing market, which was strong in the past week, may bring back some expectations for a
September rate hike from the Fed. The dollar, which  eased  in the wake of the central bank's
minutes released on Wednesday, could see a rebound if the data shifts perceptions back towards
September for liftoff from the Fed. If the dovish interpretations of the Fed hold it may help
keep a bid under bonds, along with month-end extensions for Treasuries, concerns over tumbling
stocks and low inflation concerns. However, yields could come under pressure as the Treasury
sells new supply while Fed Vice Chair Stanley Fischer will be closely watched when he speaks on
inflation in Jackson Hole next Saturday for any rate hike clues.

The National Association of Realtors on Thursday releases its Pending Home Sales data for July.
Economists expect the index to have gained 1 percent in July after it declined 1.8 percent in
the previous month. The Conference Board, an industry group, is expected to issue the index of
consumer attitudes on Tuesday. The U.S. consumer confidence index is expected to rise to 93.3 in
August from 90.9 last month. On the same day, financial firm Markit's preliminary reading of its
Purchasing Managers Index for the service sector is predicted to edge higher to 56.0 in August
from the final reading of 55.7 in July. Also on Tuesday, the S&P/Case Shiller composite index of
20 metropolitan areas releases for the month of June. The index in June is projected to have
gained 5.1 percent, year over year. 
Toll Brothers Inc, the largest luxury U.S. homebuilder, is likely to report a jump in
third-quarter orders on Tuesday, as the housing recovery gathers steam. Latest data showed a
rise in housing starts as well as mortgage applications, suggesting the market was firing on all
cylinders. Demand is expected to spike in the next few weeks, ahead of a possible interest rate
increase in September. Toll Brothers is better positioned than most other national homebuilders
since its affluent customers are less affected by fluctuations in mortgage rates. Investors will
be looking for comments on whether Toll expects increases in selling prices to moderate over the
next few months.
On Thursday, discount retailer Dollar General Corp is expected to report second-quarter revenue
in line with analysts' average estimate. The company, which is set to be dethroned as the top
U.S. discount retailer by store count after it lost a takeover battle for smaller rival Family
Dollar Stores Inc to Dollar Tree Inc, expects to speed up store openings this year.

On Wednesday, PVH Corp, the owner of Tommy Hilfiger and Calvin Klein brands, is expected to
report second-quarter sales below estimates. PVH, which gets a majority of sales from
international markets, is affected by a strong dollar that reduces the value of those sales.
Sales are likely to fall in the quarter, in part due to currency impact in the core Tommy
Hilfiger brand, analysts say. The company has been increasing promotions in the United States to
fend off fast fashion retailers who have taken away shoppers.
Best Buy Co Inc reports its second-quarter earnings on Tuesday. The electronics retailer has
stabilized the business by aggressively cutting costs under its Renew Blue program but concerns
about its market share and margins in the face of intensifying competition persist. Investors
will be looking for comments on the pipeline of product launches, real estate optimization, new
investments in its online business and store-in-store partnerships with OEM's.

Luxury jeweler Tiffany & Co is expected to report second-quarter sales and profit in line with
estimates on Thursday. Tiffany is heavily dependent on macro economic factors such as the
strength of the dollar and other currencies which determine tourists' spending behavior. While a
smaller influx of Chinese and Japanese visitors to the United States has taken some shine off
sales at stores such as the flagship Fifth Avenue store in Manhattan, the company said last
quarter that it saw an uptick in tourist spending in Europe as weaker euro and pound encourage
spending in the region. Investors will be interested in comments on the impact of the recent
yuan devaluation in China and how that could affect business and any forecast for the current
Software maker Autodesk Inc is expected to report second-quarter revenue slightly below average
analysts' estimate on Thursday. The company, which makes computer-aided design software AutoCAD,
forecast lower-than-expected second-quarter revenue in May, citing a strong dollar, and also cut
its full-year revenue forecast. The company has been moving to cloud subscriptions from
license-based model which is impacting results as subscriptions bring less money up front.
Investors will be looking for growth in subscriptions and billings.

Human resource software company Workday Inc is expected to report a smaller-than-expected loss
for the second quarter on Wednesday. The company, which makes software to manage employee
performance and payroll, hopes to make a turnaround in spending on marketing and product
development. The company's revenue is expected to come above analysts' estimate, helped by
continued subscription growth for its web-based human resource management software.

GameStop Corp reports its second-quarter results on Thursday. The world's largest retailer of
video game products is expected to benefit from the June release of "Batman: Arkham Knight", the
latest in the "Batman Arkham" series by Warner Bros. The Street has worried about the impact of
digital game downloads on the company's software sales. But in the last quarter, GameStop
mitigated the concerns by reporting an increase in mobile game downloads, a trend expected to
continue to the second quarter.
J.M. Smucker Co, the maker of Folgers coffee and Jif peanut butter, is likely to report its
first-quarter sales above the analysts' average estimate, on Thursday. The company in July cut
prices for most of its Folgers and Dunkin' Donuts coffee brands in the United States by 6
percent, partially reversing last year's price hikes, to woo back customers, as green coffee
costs fall. Analysts are looking out for cost-cutting announcements following the company's $3.2
billion acquisition of pet food maker Big Heart Pet Brands.

Teen apparel retailer Abercrombie & Fitch Co is expected to report its tenth straight quarter of
falling sales on Wednesday. The company's North America sales are expected to fall again in the
second quarter, mainly due to weak traffic and demand for its clothes, heavy discounts and
intense competition. While Abercrombie has seen an improvement at its Hollister brand in Europe,
a stronger dollar is also expected to hurt the company this quarter as it gets nearly 40 percent
of revenue from international markets. Investors will be looking for comments on quarter-to-date
trends, back-to-school sales, impact of price cuts in Europe, plans to reinvigorate traffic, and
benefits from lower cotton costs.

Troubled mall-based retailer Aeropostale Inc is expected to report its 11th straight quarter in
the red on Thursday. A combination of falling mall traffic, weak demand for its casual apparel,
and heavy promotions is expected to hurt the company in the second quarter. The company has
closed underperforming stores, cut costs, improved the store experience and is betting on a
merchandise overhaul to drive sales in the crucial back-to-school shopping season. Investors
will look for trends so far in the third quarter, forecast, and commentary on sales in the BTS

On Tuesday, Bank of Canada Deputy Governor Lawrence Schembri will speak at the Canadian
Association for Business Economics' policy conference in Kingston, Ontario. Schembri's topic
will be "The Long-Term Evolution of House Prices: An International Perspective".
Mexican data on Monday for early July is expected to show the annual inflation rate has cooled
to a new record-low as weak growth offsets a sharp drop in the peso currency. Current account
data on Tuesday will show how foreign investment flows held up in the second quarter, while
trade balance data on Thursday will show if exports picked up in July after uneven exports to
the United States weighed on the economy in the first half of the year. On Friday, the
statistics institute reports the jobless rate while the finance minister will declare its fiscal
balance as of July.  


Federal Reserve Bank of Atlanta President Dennis Lockhart speaks on "Pensions and Economy"
before the 2015 Public Pension Funding Forum co-hosted by the National Conference On Public
Employee Retirement Systems, in Berkeley, Calif. (1555/1955)

Mexico's national statistics institute releases the inflation rate in the 12 months through
mid-August. The annual figure is expected to ease to 2.70 percent from 2.76 percent in July.
(0900/1300) Separately, the Argentinean government issues the trade surplus data for July after
it narrowed to $456 million a month earlier.   

LIVECHAT: OUTLOOK FOR RATES with Wilmington Trust's Luke Tilley
As September nears, the message is increasingly clear from the Fed that a rate hike is imminent.
So why are markets so nervous? Join the discussion at 1000 ET/1400 GMT for a chat about markets
and the Fed with former Philly Fed official Luke Tilley. To join the Global Markets Forum, click

(All analysts' estimates are according to Thomson Reuters StarMine, unless mentioned otherwise)

 (Compiled by Hardik Vyas in Bengaluru; Editing by Maju Samuel)
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