October 29, 2014 / 6:48 PM / 4 years ago

What to Watch in the Day Ahead - Thursday, Oct. 30

(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) The U.S. Commerce Department releases gross domestic product figures. The economy likely advanced at a solid 3.0 percent annual rate in the third quarter. The figure would mark a slowdown from the second quarter’s outsized 4.6 percent gain, but a reading of domestic demand likely gained speed with much less of the strength coming from inventories - a sign of growing fundamental strength. While weakness overseas has raised questions over the sustainability of above-trend U.S. growth, many economists think a tightening labor market is providing the fuel needed to keep the recovery on track (0830/1230). The Labor Department releases weekly unemployment claims data (0830/1230). Mastercard Inc’s volume growth has been decelerating due to a key issuer loss. Shares of the world’s second-largest payments company are down as much as 12 percent this year on investor concerns about international sanctions on Russia and competition from new forms of mobile-based payments. The company reports third-quarter results and is expected to implement merchant-acquiring fee increases in January that could add to its revenue growth and earnings. Time Warner Cable Inc reports third-quarter results before the bell. Investors will be looking for any comment regarding the decision of HBO and CBS to go over-the-top and anything new on the pending merger with Comcast. Social networking website for professionals LinkedIn Corp reports third-quarter results. LinkedIn is likely to beat the average analyst estimate, according to StarMine data, as it gains market share from job sites such as Monster.com and Careerbuilder. The company is also expected to benefit from its timeline ads and growing user base. Investors would focus on user growth rate and engagement after social media companies such as Twitter reported slowing user engagement. Federal Reserve Chair Janet Yellen gives welcome remarks before the “National Summit on Diversity in the Economics Profession” conference hosted by the Federal Reserve, in Washington (0900/1300). Brazilian miner Vale SA is expected to post a hefty drop in third-quarter earnings as iron ore prices fell to five-year-lows during the quarter. Investors will be keeping an eye out for any news on cuts to investment projections or any projects that might be dropped. Gold miners Newmont Mining Corp and Goldcorp Inc reports third-quarter results. Newmont is expected to report a drop in third-quarter profit and lower revenue. The company resumed copper concentrate shipments from Indonesia in late September, ending a nine-month suspension from its Batu Hijau mine after the government imposed hefty export taxes. Analysts will watch for any changes to Newmont’s production forecasts, which the company updated in late September. Goldcorp is expected to report a dip in profit, but higher revenue. Any changes to production forecasts will be a key focus for investors. Some analysts expect the start up of Goldcorp’s Cerro Negro mine in Argentina and resumption of production at the Los Filos mine to boost quarterly production. Also of interest are any comments about the El Morro gold and copper project. Mosaic Co reports third-quarter results after recently curtailing phosphate output due to rising costs. Of interest is any update on how long the curtailment will last and thoughts on timing of a potash supply contract between China’s Sinofert and Canpotex, a company owned by Mosaic and other North American miners. Starbucks Corp, the world’s biggest coffee chain, posts fourth-quarter results before the bell. Investors expect Starbucks to report another quarter of red-hot U.S. cafe sales, but are braced for any inkling of a cooling trend. They will also keep an eye on its performance in China, where sales at KFC and McDonald’s have been hard hit by a meat supplier scandal. Western Union Co, the world’s largest money-transfer company, is expected to report a dip in third-quarter profit, hurt by higher regulatory costs. The company is facing rising costs as regulators worldwide crack down on money laundering. Western Union, which has ramped up its digital money transfer business, is being investigated by U.S. regulators for misrepresenting the performance of its digital unit. The company has pushed its guidance of $500 million in digital revenue beyond 2015. Western Union has been negatively affected by slowing consumer money transfer growth due to low foreign exchange volatility. Health insurer Cigna Corp, which has traditionally focused on employer-based health plans, is expected to report a decline in third-quarter profit. Asset manager Invesco Ltd is scheduled to report third-quarter results before market opens. Analysts expect the money manager to earn 62 cents per share, up from 55 cents per share a year earlier. Kellogg Co, the world’s largest maker of breakfast cereal, cut its full-year adjusted sales and profit forecasts in July as demand for its Corn Flakes and Special K cereals continued to wane in the United States, its biggest market. The company has reported five straight quarters of sales declines in its U.S. cereal business, hurt by the rising popularity of other breakfast items such as yogurt and frozen egg sandwiches. When the company reports third-quarter results, investors will look for details on how it plans to revive its U.S. business and implement its strategy of repositioning its brands to focus on their nutritional value. ConocoPhillips is scheduled to report third-quarter earnings and update investors on its big investment in growing production from U.S. shale fields including the Eagle Ford in south Texas in a time when crude oil prices have fallen more than 20 percent. National Oilwell Varco Inc, the largest U.S. oilfield equipment provider, is expected to post a higher third-quarter profit, buoyed by demand for its land rigs and jack-up rigs, which are used in shallower waters. Investors will look for any outlook on capital spending considering the recent downward spiral of oil prices. Offshore driller ENSCO Plc is expected to report a lower third-quarter profit, hurt by weak demand, which has in turn led to an oversupply of rigs. Investors will be on the lookout for any efforts to reduce costs and comment on drilling activity and customer response, giving the decline in oil prices. Coal miner Alpha Natural Resources Inc, which is struggling with falling prices for steel-making coal and government regulations that are causing electric utilities to close coal-fired power plants, is expected to report a bigger third-quarter loss and third straight drop in quarterly revenue. Investors will be looking for comments on further cuts in coal production, impact of the rail issues, demand for steel-making coal and further cost-cutting initiatives. Auto parts maker Johnson Controls Inc is likely to benefit from higher demand in its power solutions unit as automakers increasingly look to build more fuel-efficient vehicles. When the company reports fourth-quarter results, investors will be looking for comments on its JV with Chinese company Yanfeng Automotive Trim Systems, a move that is expected to create the world’s largest automotive interiors company. Harman International Industries Inc, which makes car audio systems, is expected to post first-quarter revenue above analysts’ estimates, according to StarMine data. The company is expected to benefit from higher sales of its car audio systems. Investors will be looking out for updates to the company’s full-year outlook. GoPro Inc is likely to post a better-than-expected third-quarter profit, according to StarMine, helped by strong demand for its wearable cameras used to record outdoor activities and sports. The company recently launched an entry-level camera and a new flagship camera - Hero4 - ahead of the holiday shopping season as competition intensifies in the wearable camera market with rivals such as Garmin, Sony, JVC and even HTC launching or revamping their offerings. Online travel agency Expedia Inc, which gets more than half of its revenue from the United States, is expected to post higher third-quarter revenue and profit, driven by higher hotel and flight bookings. Investors will look for an update on how world travel concerns due to Ebola may impact the company in the current quarter. News and information company Thomson Reuters Corp reports third-quarter results. The company said net sales for its financial products were positive in the second quarter and analysts and investors will be keen to hear if that is a trend. Additionally, there likely will be questions around new messaging products out in the marketplace that are trying to displace Bloomberg. The New York Times Co reports third-quarter results. Subscription revenue growth is slowing though the company made big strides in online advertising. Questions remain about where it plans to cut after it announced a reduction in staff earlier this month. Outerwall Inc, the operator of Redbox video rental kiosks, is expected to report third-quarter revenue above estimates, according to StarMine data. The company, which is grappling with lower revenue from the Redbox video rental kiosk business, is expected to benefit from the release of a number of blockbuster movies on DVDs in the second half of the year. Navigation software maker Trimble Navigation Ltd is expected to report a third-quarter profit below analysts’ estimates, according to StarMine data. Investors will look for comments on its fourth-quarter forecast. Audio chipmaker Audience Inc is expected to report third-quarter revenue below estimates after its biggest customer, Samsung, warned of increasing competition and weak earnings. Analysts will be looking for fourth-quarter guidance from the company, which supplies chips that improve voice quality in mobile phones. Beauty products company Elizabeth Arden Inc, struggling with weak sales for the past year, is expected to report another disappointing quarter as sales of perfumes, its biggest division, continues to shrink. When the company report first-quarter results, investors will watch out for its progress on restructuring and new product launches this holiday season. Brazil’s IGP-M index, which encompasses wholesale, construction costs and consumer prices, is the country’s broadest price measure and data for October is scheduled for release. It has declined in recent months as wholesale food prices dropped, suggesting a relief in consumer inflation in coming months. Chile’s unemployment figures for July-September are also expected in the day. Jobless numbers have been gradually creeping up as the economic slowdown bites. (Compiled by Ayesha Sruti Ahmed in Bangalore; Editing by Maju Samuel)

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