April 13, 2015 / 6:34 PM / 3 years ago

What to Watch in the Day Ahead - Tuesday, April 14

(The Day Ahead is an email and PDF publication that includes the day's major stories and
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JPMorgan Chase & Co, the biggest U.S. bank by assets, is expected to report a rise in
first-quarter profit as revenue from fixed-income trading rebounds. Trading picked up early in
the quarter after the Swiss National Bank shocked currency markets by scrapping a three-year old
cap on the Swiss Franc without warning, causing the currency to soar against the euro. The bank
has been trying to put a lid on expenses and investors will be looking for comments on what more
the company will do to cut costs.
Wells Fargo & Co, the largest U.S. mortgage lender, is expected to benefit from a surge in
refinancing activity during the first quarter. Wells Fargo is also expected to post strong loan
and deposit growth as interest rates continue to decline. The bank, which has been cashing in on
the U.S. energy boom, said in January it is reviewing the possible energy loan defaults
exposure. Analysts are expecting higher credit cost due to potential loan loss reserve against
energy provisioning.
Healthcare conglomerate Johnson & Johnson is expected to report slightly lower first-quarter
profit as the strong dollar takes a toll on overseas sales. Declining sales of its hepatitis C
drug somewhat offsets strong demand for new cancer medicines. Investors will be keen to see any
evidence that sales of medical devices and consumer products will bounce back in 2015, after a
disappointing 2014, as management suggested would be the case in January.
U.S. retail sales likely bounced back sharply in March from an earlier slump, helped by strong
spending at auto dealers. The 1.0 percent gain in retail sales expected to be reported by the
Commerce Department would help curb concerns over recent weakness in the economy, and keep the
Federal Reserve on track to hike interest rates later this year. (0830/1230) The Commerce
Department will also issue data for February business inventories. (1000/1400) Separately, the
Labor Department will release figures on March producer prices. They are expected to break a
four-month-long downstreak with a gain of 0.2 percent, another sign that would be welcomed by
the Fed. (0830/1230) Also, the National Federation of Independent Business issues Small Business
Optimism Index for March. (0900/1300)
Intel Corp is expected to report first-quarter results marginally below lowered Wall Street
estimates, according to Thomson Reuters StarMine data. The company slashed nearly $1 billion
from its first-quarter revenue forecast in March as small businesses put off upgrading their
personal computers. PC shipments fell 5.2 percent in the first three months of this year,
extending three years of declines, according to Gartner. Some analysts speculate that a possible
uptick in demand in the June quarter could help the company issue a positive forecast.
CSX Corp, the third-largest U.S. railroad, reports first-quarter results after the market
closes. Analysts will be watching for signs of increases in the rates CSX charges to haul
freight. Rising demand for freight has allowed the railroads to start raising prices and if the
economy keeps growing, that should enable the railroads to hike rates further.
Canadian media and cable company Shaw Communications Inc is expected to report a slightly lower
second-quarter profit as its video subscriptions continue to fall. Demand for video
subscriptions is sliding as customers switch to comparable products from phone companies,
Netflix and websites such as YouTube. Investors will know to know more about the company's
on-demand video streaming service Shomi which it recently launched in partnership with Rogers
LIVE CHAT - FED POLICY: Searching for Goldilocks in an inflation-less economy with Cumberland
Advisors Chairman David Kotok
Managing the risk of waiting too long in order to avoid acting too soon is a perilous
proposition for the Federal Reserve, argues Kotok, pointing to that overall terrible parallel,
that 1937 comparison, where excessive austerity hit a still-struggling economy. (1000/1400) Join
the Global Markets Forum to discuss the danger. Separately, Jonathan Barratt, Economist, CIO
Ayers Alliance and Principal at Celsiuspro.com joins the Global Markets Forum from Sydney to
talk about energy, metals, China and the global economy. (0100/0500) To join the Forum, click
here bit.ly/1kTxdKD
Unexpected softness in emerging market economies is likely to be highlighted by the
International Monetary Fund as it releases its periodic World Economic Outlook (WEO) report with
fresh growth projections for nations around the globe. The WEO is likely to reiterate IMF chief
Christine Lagarde's call for action to avoid a "new reality" of subpar growth. Investors will be
on the lookout for any IMF recommendations on Federal Reserve policy and for its view of the
impact of the strong U.S. dollar on growth here and overseas. As for Europe, the IMF is likely
to welcome signs of faster growth.
Canada's Teranet-National Bank Composite House Price Index, which measures price changes for
repeat sales of single-family homes, will be released for the month of March.
Brazil's statistics agency IBGE releases retail sales data for February. Retail sales have
disappointed as the economy slipped into recession and consumer confidence fell to record lows.

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