October 14, 2015 / 6:34 PM / 3 years ago

What to Watch in the Day Ahead - Thursday, Oct 15

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Like its peers, Citigroup Inc, the third biggest U.S. bank by assets, is expected to be hurt
during third-quarter by market volatility and low interest rate environment.  Chief Financial
Officer John Gerspach has already said trading revenue will decline from a year earlier due to
increased volatility. Investors will be keen to know more about the impact of increased
volatility on the bank's outlook for the fourth quarter.
Goldman Sachs Group Inc is expected to report a decline in third-quarter profit as volatile
Chinese markets and the U.S. Federal Reserve's decision to hold off from raising interest rates
hit bond trading and capital markets revenue. Weak trading that has continued into the fourth
quarter is likely to drag income lower still, some analysts say. It is expected, however, that
Goldman Sachs's IPO fees will outpace those of its peers such as Citi and JPMorgan.
UnitedHealth Group Inc, the largest U.S. health insurer, reports third-quarter earnings that are
expected to rise a bit from last year. The company, which sells employer-based insurance as well
as Medicare, Medicaid and Obamacare health plans, is the only large insurer not involved in one
of the major consolidation deals under review by antitrust regulators. The company's earnings
are expected to be lead by its Optum drug benefit and technology business. As the first of its
peers to report, its commentary on medical cost trends often impacts the shares of its peers.
Schlumberger Ltd, the world's No.1 oilfield services provider, is expected to report a steep
fall in third-quarter profit as lower oil prices weigh on global drilling activity. Investors
will be looking out for any updates on the company's move to buy equipment maker Cameron
International. Schlumberger's North American onshore drilling results are expected to be weaker,
but deep cost cuts are expected to cushion the impact and help sustain margins. Declining
drilling activity is expected to dampen onshore pricing and investors will be looking for
comments on pricing and expectations for industry spending for the year end and next year. As
U.S. drilling costs are seen as approaching levels where they cannot be reduced any further, a
key focus will be on how oil production will be affected from major shale plays.
U.S. consumer prices likely fell in September as gasoline prices declined and a strong dollar
muted underlying inflation, which could further cast doubts on an interest rate hike this year.
The consumer price index is expected to have dropped 0.2 percent last month after slipping 0.1
percent in August. Excluding food and energy, the so-called core CPI is forecast to have edged
up 0.1 percent for a third straight month. (0830/1230) Separately, the number of Americans
filing new applications for jobless benefits is likely to have increased 7,000 to a seasonally
adjusted 270,000. (0830/1230) Meanwhile, the Federal Reserve Bank of Philadelphia issues
Business Outlook Survey for October. (1000/1400)
Federal Reserve Bank of New York President William Dudley participates in conversation on how
the Fed should decide on the appropriate level of interest rates at an event hosted by the
Brookings Institution. (1030/1430) Separately, the Federal Reserve Bank of St. Louis President
James Bullard gives opening remarks before the 40th Annual Fall Policy Conference hosted by the
Federal Reserve Bank of St. Louis. (1030/1430) Meanwhile, the Federal Reserve Bank of Cleveland
President Loretta Mester speaks on "Determinants of Long-Run Growth and Future Growth Prospects"
before the New York University Stern School of Business Center for Global Economy and Business.
Blackstone Group LP, the world's largest alternative asset manager, is due to report
third-quarter earnings, with analysts expecting it to report an economic net loss as stock
market jitters hurt the value of its holdings.
Charles Schwab Corp, considered a proxy for retail investors' involvement in the market, is
expected to have had a choppy third quarter, marked by heavy customer trading in August followed
by an abrupt withdrawal in September. Analysts expect so-so commission revenue and a decline in
asset-based account fees that echo the S&P 500's 4 percent dip in the quarter. They forecast
Charles Schwab earned 27 cents per share, up from 23 cents a year ago. But the Fed's reluctance
to raise interest rates means investors expecting a rate-induced earnings bonanza are still in
wait mode.
Toymaker Mattel Inc is expected to report third-quarter profit below analysts' average estimate,
as it struggles against a strong dollar. Mattel is in the middle of a turnaround as its Barbie
dolls have fallen out of favor with young girls. The company is likely to have hiked spending on
marketing and other promotions ahead of the holiday season, which could have weighed on profit
in the quarter. Investors will be looking for Mattel's plans to sign new deals with popular
movie franchises to compensate its contract for Disney Princess toys, including dolls based on
the blockbuster Frozen franchise, ending in 2016.
Chipmaker Advanced Micro Devices Inc is expected to report third-quarter profit and revenue
below analysts' average estimate. The company, which announced 500 job cuts earlier this month,
has been struggling with intense competition and weak demand for its chips used in personal
computers. The company has been shifting focus to make chips for gaming consoles and low-power
servers, but progress has lagged Wall Street's expectations due to tough competition from Intel
Corp and newer companies. Investors will be looking to see what impact the company's
restructuring had on results.
Winnebago Industries Inc, the largest U.S. motorhome maker, is expected to report lower
fourth-quarter profit as average selling prices likely fell. The company has been selling more
lower-priced recreational vehicles as it faces lower demand for its top-end motorhomes. The
company's capital expenditure has also increased as it tries to cope with a shortage of workers
at a key plant in rural Iowa and rectify problems related to sourcing key components from
suppliers. Investors will be looking to see if the company is able to contain its expenses, and
comments on 2016 financial forecast.
The industry group for Canadian real estate agents will release existing home sales data for
September. Sales of existing homes rose 0.3 percent in August from July, as strength in the two
big markets of Vancouver and Toronto offset weakness elsewhere.
Peru's economy likely grew 3.0 percent in August from the same month a year ago, as rising
copper production continued to offset weak construction activity. Meanwhile, Chile's central
bank meets to set interest rates. The market is divided as to whether it will hold the rate at
3.0 percent or begin hiking the rate, with the bank caught between a still weak economy and
stubborn inflation.
Puerto Rico's debt-ridden PREPA must get a deal with its bond insurers or extend a creditor
agreement again to protect it from lawsuits. PREPA has reached deals with its bondholders and
banks but the insurers are holding out. 
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(All references to a company's results expected to beat or miss analysts average estimate are
according to Thomson Reuters StarMine, unless mentioned otherwise)

 (Compiled by Sourav Bose in Bengaluru; Editing by Savio D'Souza)
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