(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) WEEK AHEAD The Federal Reserve’s policy meeting next week will be a big event for equity, currency and bond markets. With traders widely expecting the Fed not to take any action next Wednesday, investors will look for the central bank’s view on the economy and to tease out its pace for raising interest rates in a world of soft demand and low inflation. The Fed will likely downgrade its “dot plot” from four rate hikes to the current market view of not more than two increases, which should spur appetite for bonds and push two-year Treasury yields from their highest levels in two months. If the Fed puts markets on notice for a rate hike in the months ahead, the dollar would stand to benefit. Stocks have rallied back in the past month, with the S&P 500 closing in on flat for the year, so indications of a faster-than-expected path of hikes could blunt the rally.
A heavy economic data week, with February retail sales and inflation reports dominating the calendar. These reports could shed more light on the health of the economy and the path of U.S. monetary policy. The Commerce Department is expected to report on Tuesday that retail sales fell 0.1 percent, reversing January’s 0.2 percent gain, according to a Reuters survey of economists. The expected decline reflects cheaper gasoline, which has weighed on the value of receipts at service stations, and a slight drop in automobile sales. But core retail sales, which exclude gasoline, autos, building materials and food services, are expected to have increased 0.2 percent after rising 0.6 percent in January. Also on Tuesday, the Labor Department is expected to report that producer prices dipped 0.2 percent in February after rising 0.1 percent in the prior month. On Wednesday, a report from the Labor Department will likely show that the consumer price index fell 0.2 percent in February on lower gasoline prices after being unchanged in January. The core CPI, which excludes energy and food prices, likely rose 0.2 percent after increasing 0.3 percent in January. The Commerce Department is expected to report that housing starts rose to a 1.15 million-unit annualized rate in February from a 1.099 million-unit rate in January. Also on Wednesday, the Federal Reserve is expected to report that industrial production fell 0.3 percent in February after spiking 0.9 percent in January. Weekly jobless claims on Thursday cover the survey period for March nonfarm payrolls. Claims fell to a five-month low in the week ended March 5. Also on Thursday, the Labor Department will release its jobs openings report for January. Other reports due on Thursday include the Philadelphia Federal Reserve business conditions survey for March and the Commerce Department’s current account report for the fourth quarter.
Valeant Pharmaceuticals International Inc, under scrutiny for its accounting and business practices, releases fourth-quarter results on Tuesday after much delay related to the recent recovery of health for CEO Mike Pearson and an internal committee’s investigation of a specialty pharmacy it previously used. The embattled drugmaker, which will also update its 2016 forecast, added a representative from shareholder Pershing Square Capital Management to its board along with two other new directors.
Oracle Corp is expected to report third-quarter revenue slightly below estimates on Tuesday, according to Thomson Reuters StarMine data, hurt by a strong dollar and a continued drop in licensed software sales. Oracle, like other established technology companies, has been moving its business to the cloud-based model, essentially providing services remotely via data centers rather than selling installed software.
Adobe Systems Inc is expected to report first-quarter revenue and profit above estimates on Thursday, according to Thomson Reuters StarMine data, helped by a strong subscriber growth for its Creative Cloud package of software tools. San Jose-based Adobe has largely finished switching to web-based subscriptions from traditional licensed software to enjoy a more predictable recurring revenue stream.
On Friday, Federal Reserve Bank of St. Louis President James Bullard speaks on the U.S. economy and monetary policy before the Ninth Conference of the International Research Forum, in Frankfurt, Germany. Meanwhile, Federal Reserve Bank of New York President William Dudley gives welcome and opening remarks before the “Supervising Large, Complex Financial Institutions: Defining Objectives and Measuring Effectiveness” conference. At the same conference, Eric Rosengren, President of the Federal Reserve Bank of Boston discusses objectives and goals of supervision.
Tiffany & Co is expected to report profit and revenue below analysts’ estimates for the fourth quarter on Friday, according to Thomson Reuters StarMine. A sustained decline in tourist spending in the United States, the stronger dollar and a slowdown in China are expected to hurt Tiffany’s sales. Investors will look for forecast and commentary on luxury and tourist spending.
On Tuesday, plaintiffs suing General Motors Co over a faulty ignition switch will ask the 2nd U.S. Circuit Court of Appeals in Manhattan to reverse a pair of rulings last year that largely upheld the automaker’s protection from liability over conduct predating its 2009 bankruptcy.
TerraForm Power Inc, a yieldco of SunEdison, is expected to post a loss in the fourth quarter on Tuesday, compared with breakeven results a year earlier, as demand falls. Investors will look for comments on the company’s forecast and an update on Vivint Solar terminating a deal to be acquired by SunEdison.
Boeing Co Commercial Airplanes Marketing Vice President Randy Tinseth is due to give market update on Wednesday at the Bank of America Merrill Lynch Global Industrials & EU Autos Conference in London.
BRP Inc, maker of Ski-Doo snowmobiles and Sea-Doo watercraft, is expected to post a fall in fourth-quarter profit on Friday, as a warmer winter across North America hurt its snowmobile business. Investors will look for comments on the company’s outlook and update on its Russian operations.
Canada is scheduled to release inflation and retail sales figures on Friday. Annual inflation is expected to have cooled in February to 1.6 percent, pulling away from the Bank of Canada’s 2 percent target and giving the central bank room to remain accommodative. Retail sales for January will also be watched to see how the consumer was holding up at the start of the year. Sales are forecast to have risen by 0.8 percent, offsetting some of December’s disappointing slump.
Brazil’s statistics agency, IBGE, will issue its national unemployment rate on Tuesday. On Friday, Mexico’s central bank announces its key lending rate for March. The central bank had unexpectedly raised its benchmark interest rate by 50 basis points to 3.75 percent in February. Peru’s gross domestic product (GDP) for January and Chile’s fourth-quarter GDP are scheduled to be released on Tuesday and on Friday, respectively. Chile’s third-quarter GDP grew 0.4 percent from the second on seasonally adjusted terms. On an annual basis, third-quarter growth was 2.2 percent.
Viacom Inc hosts its shareholder meeting at Viacom International Studios. Shareholders are expected to reject a proposal to extend voting rights and to approve the media company’s directors, despite recommendations from Institutional Shareholder Services to the contrary.
Jury selection is set to begin in the second trial involving a car accident blamed on a faulty ignition switch that prompted General Motors Co to recall 2.6 million vehicles in 2014. The first trial ended abruptly in January without a verdict when allegations surfaced that the plaintiff in that suit gave misleading testimony. It could be the first chance for a jury to actually weigh in on whether or not GM committed fraud by failing to inform the public about the switch problems.
Amaya Inc, the operator of online gambling website PokerStars, is expected to post a fourth-quarter profit, compared with a loss a year earlier. The company has said it will not provide any forecast for 2016 as it evaluates a non-binding go-private offer from Chief Executive David Baazov. Investors will look for updates on the proposal.
Brazil’s central bank releases results of a weekly economic survey with more than 100 financial institutions. This will include forecasts for GDP, interest rates and inflation rates.
LIVECHAT: SIGNS THE U.S. ECONOMY IS STALLING with TrimTabs Investment CEO David Santschi U.S. Treasury income and employment taxes from the paychecks of 141 million U.S. workers are slowing, a worrisome and reliable indicator that may signal U.S. recession, according to David's TrimTabs Investment Research data and distinctive methodology. (1300/1700) To join the Global Markets Forum, click here here
LIVECHAT: KEEPING SCORE with Rick Horrow The Professor of Sports, Rick Horrow - also host of the Reuters Keeping Score podcast - discusses the business of sports with Forum members and marketing and brand executives of major events from around the world. (1200/1600) To join the Global Markets Forum, click here here (Compiled by Sourav Bose in Bengaluru; Editing by Sriraj Kalluvila)