October 20, 2015 / 7:24 PM / 3 years ago

What to Watch in the Day Ahead - Wednesday, Oct 21

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General Motors Co, the No.1 U.S. automaker, will try to convince a skeptical Wall Street that
much of its problems are behind it, as it reports its third-quarter results. A slowdown in sales
in China and South America is expected to weigh down a moderate recovery in Europe. GM said on
Oct. 1 that it expected before-items earnings for 2015 of $5-$5.50 per share. Investors will be
looking out for management's comments and guidance regarding foreign sales, particularly China.

Beverage giant Coca-Cola Co's third-quarter revenue is likely to come in below the average
analyst estimate. Rival PepsiCo reported revenue and profit above analysts' estimates, helped by
higher demand for snacks and non-carbonated beverages in North America. Coca-Cola's higher sales
in North America in the last two quarters have mostly come from higher prices and distribution
of energy drinks made by Monster Beverage, in which Coke bought a stake last year. The company
said in September it was planning to sell nine production facilities to three of its independent
bottlers as it seeks to unload low-margin assets and reduce manufacturing costs. Investors will
be looking out for comments on the performance of Keurig's Kold cold drink making device, for
which Coke has partnered with Keurig, and other measures to diversify beyond bottled carbonated
drinks and cut costs. 

American Express Co, the world's biggest credit card issuer, is expected to report third-quarter
earnings in line with analysts' estimates. AmEx, which generally caters to affluent customers,
is now looking to tap into a customer base with relatively lower credit scores in the wake of
increasing competition and the loss of exclusive contracts with CostCo Wholesale Corp and
JetBlue Airways. AmEx reaffirmed its long-term guidance recently though the last four quarters
have been lukewarm. Investors will be interested in the company's growth plans and new exclusive
agreements to offset the impact of its fallout with CostCo.

With Boeing Co having delivered 37 of its 787 jetliners in the third quarter, well above the
target of 30, investors will be looking for strong cash flow in its results and evidence that
Boeing is reducing 787 production costs and catching up to Airbus's massive lead on new plane
sales this year. A charge related to costs of developing the 747-8, which has failed to attract
a sale for two years, may come as a possible surprise in the report. There's also talk that 787
deliveries will slow in October, which seems inevitable given the high pace in the third

Abbott Laboratories Inc is expected to report third-quarter sales above analysts' estimates due
to increased demand for its generic drugs. The company, which is more than 120 years old, beefed
up its basket of generic drugs by buying Chile's CFR Pharmaceuticals for nearly $2.9 billion
this year. Analysts will want to see if the company, which gets nearly 70 percent of its revenue
from outside the United States, is able to keep up the 30 percent-plus growth rate it has seen
in branded generic sales. Analysts will also be looking for commentary from the company about
acquisitions in the medical device maker space.

When U.S. biotech company Biogen Inc reports its third-quarter results, investors will be
looking for any signs of a bounceback after a disappointing first half of the year. The company
has lost nearly a third of its market value since it slashed its full-year sales forecast in
July due to slowing demand for its oral multiple sclerosis drug, Tecfidera.

U.S. pipeline company Kinder Morgan Inc is expected to report a lower third-quarter profit, hurt
by a drop in U.S. oil production. Kinder Morgan, which folded all its units into one publicly
traded company last year amid weak oil prices, has been on an acquisition spree. The company
said on Tuesday it was buying some U.S. fuel storage terminal assets from BP Plc. Earlier this
year, it acquired Royal Dutch Shell's stake in a natural gas joint venture and also a pipeline
company. It will have to raise its quarterly dividend to meet its full-year dividend target of
$2 per share. However there are investor concerns about the company's ability to do so.
Investors will want to know about the company's plans for further acquisitions and how it will
improve its margins.

Luxury carmaker Ferrari is expected to make its long-awaited debut on Wall Street. Fiat Chrysler
Automobiles is offering a 10 percent stake in the company at $48-$52 a share, a price that would
give the maker of famous sports cars such as the Testarossa a market value of up to $9.8
billion. Some analysts say Ferrari may struggle to justify such a valuation once the IPO hype
fades, given its profit margins and the investments needed to put its prancing horse logo on
other products. Fiat Chrysler plans to use the proceeds for its own ambitious turnaround plan.

Chipmaker Texas Instruments Inc has forecast third-quarter revenue below analysts' expectation
due to weak demand for its chips used in PCs and industrial and communications equipment.
Industrial and communications equipment accounts for nearly half of Texas Instruments' total
revenue. Last quarter, CFO Kevin March warned that the company did not expect any recovery in
the communications or PC markets in the current quarter. Worldwide shipments of personal
computers fell 7.7 percent in the third quarter, according to research firm Gartner. The
company, however, could benefit from the use of its chips in the latest iPhones by Apple Inc.

EMC Corp, the data storage company being acquired by Dell Inc, is expected to report
third-quarter revenue below analysts' average estimate. EMC reported preliminary results on
October 12, and the primary focus will be around any commentary on the acquisition.

E-commerce company eBay Inc is expected to report third-quarter revenue below expectations,
according to some analysts. EBay has a number of challenges ahead after spinning off its
payments business, which includes PayPal. The business has since lost customers and seen
sluggish growth in the past few years as retailers increasingly move their online operations
in-house. Revenue from the company's marketplace business, which includes its e-commerce
platform, ebay.com, fell last quarter, hurt by increasing competition from rivals such as
Amazon.com and changes in Google's search algorithms.

Oilfield services provider Baker Hughes Inc, which is being acquired by bigger rival Halliburton
for $35 billion, is expected to post a quarterly loss, compared with a year-ago profit, hurt by
a decline in drilling activity due to weak commodity prices. Investors will mainly focus on
comments around planned divestitures and timeline for the pending approval of the acquisition.
Earlier this month, Baker Hughes' third-largest shareholder, ValueAct Capital Management, said
the company's shares were undervalued and that it was looking for ways to enhance shareholder

Heart device maker St. Jude Medical Inc is expected to report third-quarter revenue in line with
analysts' estimates due to higher sales of its cardio and neuro products. The company, which has
been under pressure from rival heart device launches in the market, is expected to raise its
full-year guidance to reflect the close of its recent acquisition of Thoratec Corp. Investors
will also look for comments on the adoption of St. Jude's new heart failure monitoring device,
CardioMEMS, which was recently issued a warning letter by the Food and Drug Administration.    

Interpublic Group of Cos Inc is expected to report third-quarter revenue above the average
analyst estimate. The advertising firm, whose clients include General Motors Co, Johnson &
Johnson and L'Oreal, is benefitting from higher advertising spending by U.S. businesses.
Investors will be looking for the impact of a strong dollar on its international revenue.

Personal care products company Kimberly Clark Corp is expected to report third-quarter revenue
below estimates. The company has cut costs to boost profits, but getting more than half of total
sales from outside the United States means their value has reduced. Analysts expect volume in
the United States to have bounced back after weak showing in the previous quarter. Investors
will look out for any updates on forecast for the coming quarter and year, especially how much
impact the company expects currency to have.

Federal Reserve Board Governor Jerome Powell will be moderating "Repo Markets, Liquidity, and
the U.S. Treasury Market" panel before conference, "The Evolving Structure of the U.S. Treasury
Market" at the Federal Reserve Bank of New York. (1330/1730)

U.S. Treasury Secretary Jack Lew, Blackstone President and COO Tony James, Centerview Partners
Co-founder and Partner Blair Effron, U.S. Commerce Secretary Penny Pritzker, former U.S.
Treasury Secretary Lawrence Summers and former Council of Economic Advisers chair Laura Tyson
participate in Center for American Progress "Creating Long-Term Value: Business Leaders on
Shared Prosperity, Innovation, and Investment" conference in Washington. (0830/1230)

SanDisk Corp, a data-storage products maker, has forecast third-quarter revenue largely below
analysts' average estimate as it grapples with falling sales of solid-state drives. The company
has been grappling with a delay in sales of certain embedded parts used in solid-state drives.
Hard disk drive maker Western Digital Corp is in advanced talks to acquire SanDisk, people
familiar with the matter told Reuters on Monday. Investors will look for any deal related

Jack Dorsey, named Twitter's permanent CEO earlier this month, is expected to deliver the
keynote address at the company's annual developer conference at San Francisco's Bill Graham
Civic Center.

Angie's List Inc, the operator of website that allows users to review local businesses, is
expected to report a bigger-than-expected loss. The company has been losing market share and
subscribers because it charges customers membership fees to access reviews and ratings on its
site that Yelp, TripAdvisor and others provide for free. Angie's List has been cutting marketing
costs to make up for the weakness and said in April it expected marketing expenses to keep
falling as a percentage of revenue.

The Bank of Canada will announce its interest rate decision. After two rate cuts earlier this
year to buffer the effect of cheap oil on the economy, the central bank is widely expected to
leave rates on hold at 0.50 percent. The bank will also update its economic projections.
Canada's economy was in a mild recession in the first half of the year, but the bank expects
growth resumed in the third quarter. (1000/1400)

Mutual fund companies and other money management firms that sell their wares through brokerage
firms and investment advisers begin a two-day meet at the Money Market Institute conference in
New York. The meet is likely to discuss political and business contingencies at a time when
regulators and consumer advocates are screaming about the high costs fund companies pass on to

Brazil's annual inflation rate probably neared 10 percent in mid-October after state-run oil
company Petrobras raised fuel prices to adjust for a massive currency drop. Consumer prices
likely gained 9.79 percent in the 12 months through mid-October, the highest since December
2003. (0700/1100) Separately, Brazil's central bank is scheduled to announce its interest rate
decision. The monetary policy committee, known as Copom, is expected to keep its benchmark Selic
rate at 14.25 percent. The central bank will also release the capital flows and foreign reserves
data. Meanwhile, Mexico's statistics institute will present retail sales data. The indicator is
expected to have increased 0.30 percent in August on a monthly basis after having risen for a
third month running in July. Also, the Argentine government is due to release the September
trade balance data.

LIVECHAT - Currency Chart Corner: Take a look at the FX charts with Reuters technical analyst
Martin Miller. 
Join us for a quick round up of what the technical charts are telling us with analyst Martin
Miller at 0600 ET/1000 GMT. To join the Global Markets Forum, click here, bit.ly/1kTxdKD

 (Compiled By Nayyar Rasheed in Bengaluru; Editing by Kirti Pandey and Sriraj Kalluvila)
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