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Federal Reserve Chair Janet Yellen delivers semi-annual testimony on monetary policy before the House Financial Services Committee in Washington. The July hearing has more drama heading into it than the February testimonies. For one, Yellen starts this time with the House, where she ended last time, after trading some testy exchanges with Republican Congressmen. This week’s Congressional appearance also comes as the Fed appears closer to raising interest rates for the first time since 2006. Yellen’s appearance comes just a few weeks after the Fed’s last Federal Open Market Committee meeting, and two weeks before its next one - so she will be unlikely to drop too many policy hints and changes, unless she wants to point the market harder to September lift-off.
Dow component Intel Corp is expected to report second-quarter revenue and profit below analysts’ average estimate, according to Thomson Reuters StarMine. Intel’s revenue has been hurt by weak demand for personal computers and its late entry into the mobile market. The world’s largest chipmaker’s heavy investment to build its presence in fast-growing technologies has also dampened profits. Intel agreed to buy Altera Corp for $16.7 billion as it seeks to make up for slowing demand from the PC industry by expanding its line-up of higher-margin chips used in data centers. Investor will look for benefits from the cost cuts Intel has been implementing to offset some of its revenue weakness.
TV and movie streaming service provider Netflix Inc is expected to report second-quarter revenue above estimates, according to analysts, as the company is expected to sign more video streaming subscribers than forecast. Netflix’s original shows such as “Orange is the New Black” and “Daredevil” are also expected to help bring in new customers. The cost of driving subscriber growth has been high as Netflix continues to invest heavily in international markets but is yet to see any profits from outside the United States. The company’s board of directors approved a seven-for-one stock split last month.
Bank of America Corp, the second-biggest U.S. bank by assets, is expected to report a 60 percent increase in profit from a year earlier, when the company was being dragged down by heavy legal costs. The second-quarter results from fixed-income trading will likely lag competitors because the bank is more heavily weighted toward trading credit instruments, such as corporate bonds, and handles relatively fewer interest rate-sensitive government securities, chief financial officer Bruce Thompson warned investors in June.
The U.S. Labor Department will issue its June producer price index for final demand, which is likely to have increased at a slower pace of 0.2 percent, compared with May’s 0.5 percent. (0830/1230) Separately, the Federal Reserve releases data for June industrial output. The data is expected to show a rise of 0.2 percent after falling 0.2 percent in May. (0915/1315) In another report, the New York Fed’s Empire State general business conditions index is expected to rise to 3.00 in July from -1.98 in June. (0830/1230) Also, the Mortgage Bankers Association releases its seasonally adjusted index of mortgage application activity. (0700/1100) Separately, the Federal Reserve issues its so-called Beige Book, an compendium of anecdotes on the health of the economy drawn from the central bank’s sources across the nation.
Federal Reserve Bank of Cleveland President Loretta Mester speaks on the economic outlook and participates in a live interview before the Columbus Metropolitan Club Forum, in Columbus, Ohio. (1225/1625) In another event, Federal Reserve Bank of San Francisco President John Williams gives a brief summary on the economy before a Greater Phoenix Economic Council panel on economic trends, in Phoenix, Arizona. (1800/2200) Williams will also speak on the economic outlook before the Mesa Chamber of Commerce, Mesa, Arizona. (1500/1900)
Delta Air Lines Inc is expected to post second-quarter results in line with analysts’ expectations. However, investors will seek guidance on how the airline will respond to sagging demand abroad due to the strong U.S. dollar, a regulatory investigation into U.S. airlines’ capacity plans, and its pilots’ decision to reject management’s proposal for a new contract.
BlackRock Inc, the world’s largest asset manager, reports second-quarter earnings. The New York-based firm is expected to report an increase in profit as investors continue to pour money into its fixed income funds and ETFs.
Leading pipeline company Kinder Morgan Inc is expected to report a lower second-quarter profit, but the focus this quarter will be on the company’s reorganization. Kinder Morgan shed its tax-advantaged master limited partnership structure last August by folding its units into one publicly traded corporation in a $70-billion deal. Investors will look to see if the new structure helps allay concerns about the company’s growth prospects and complicated financial structure. The company has said the reorganization will help it grow its dividend by about 10 percent a year and clock bigger income tax savings.
CNBC and Institutional Investor host the 5th Annual Delivering Alpha conference. The one-day meeting brings together the world’s best known hedge fund managers and the largest global investors including Carl Icahn, Larry Fink and Jeffrey Gundlach. Also, U.S. Securities and Exchange Commission Chair Mary Jo White will give opening remarks at the National Compliance Outreach Program for Broker-Dealers at Washington, D.C. (1030/1430)
The Bank of Canada is forecast to leave interest rates unchanged at 0.75 percent, but with some anticipating a cut, the announcement comes with even more uncertainty than usual. (1000/1400) The central bank will also release its updated economic projections and economists will look to see if policymakers push out their expectations for when the anticipated economic rebound will take hold. Bank of Canada Governor Stephen Poloz and Senior Deputy Governor Carolyn Wilkins hold a news conference later in the morning.
Statistics Canada releases manufacturing sales data for May. Manufacturing sales are expected to show a rise of 0.4 percent, after seeing the third decline in four months in April. (0830/1230)
Brazil’s central bank is expected to release its IBC-Br index of economic activity in May, a monthly proxy for gross domestic product (GDP) data. The index is likely to rise 0.20 percent, after declining 0.84 percent in June. (0730/1130) Argentina’s government releases inflation data for June. (1500/1900) Peru’s state statistics agency Inei reports GDP data for May. GDP is likely to have expanded 2.5 percent, compared with the 4.25 percent growth in April. (1100/1500
LIVECHAT - ECB PREVIEW: Sean Maloney, chief economist, Finconomics GMF's resident central bank expert, Sean Maloney, chief economist at Finconomics, joins us at 0500 ET (0900 GMT) for a preview of Thursday's European Central Bank policy meeting. One thing that seems certain is that ECB President Draghi is going to get a fair few questions about emergency liquidity for Greek banks. To join the Global Markets Forum, click here: bit.ly/1kTxdKD (Compiled by Nivedita Balu; Editing by Simon Jennings)