(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) Markets await next week looking for answers to a couple of specific questions: how much did the economy rebound in the second quarter, how strong is the jobs market, and is the Fed going to alter its position at all? With stock markets at a high and the 10-year yield below 2.50 percent, the environment remains strong for investing, even with political risk rising and weak housing figures. Labor markets seem to be strengthening, however. Risk asset markets will wait to see whether job growth repeats June's strong figures that could lead to the S&P 500 pushing through 2,000 even if bond yields rise a bit on expectations the Fed sees the jobs data as strong enough to accelerate its plans to tighten policy.
American Express' second-quarter results are expected to beat estimates on Tuesday, helped by lower loan-loss reserves and a rise in consumer spending. The company's growth depends mostly on its affluent customer-base; people who have been pretty consistent with their spending in spite of the global recession. Core sales, which correspond most closely with the consumer spending component, increased 0.6 percent in June the Commerce Department said earlier this month. On Thursday, MasterCard is expected to post a higher second quarter profit helped by an increase in card usage as more people turn to plastic instead of cash to make purchases. However, the stellar growth of the company has been slowing and its results could be negatively impacted by a strengthening U.S. dollar, which could negatively impact cross-border transactions. Investors will look out for comments on any developments in Russia and how close the company is to signing up local partners, which will help it avoid paying a hefty security deposit in order to continue operating in the country.
Pfizer is expected to report second quarter earnings on Tuesday and investors are hoping the largest U.S. drugmaker will hint whether it is likely later this year to resume its quest to buy British rival AstraZeneca, or perhaps pursue other drugmakers. They will also be looking for updates on how Pfizer's experimental drugs, most notably its treatments for cancer, are faring in clinical trials. Pfizer is expected to report flat earnings, excluding special items, and moderately lower revenue as its many of its biggest products face competition from newer rival drugs or cheaper generics. Separately, Merck and Co is expected to post lower second-quarter sales and earnings, hurt by generic competition for its drugs to treat asthma and allergies and moderating sales growth for its Januvia diabetes drug. Investors will be most interested in progress reports on the company's experimental immuno-oncology and hepatitis C drugs.
Reports on employment and gross domestic product take center stage next week and could help to shape the monetary policy debate. The Commerce Department is expected to report on Wednesday that GDP grew at a 3.2 percent annual pace in the second quarter after contracting 2.9 percent in the prior period. (0830/1230) On Friday, the Labor Department is expected to report that nonfarm payrolls increased 231,000 in July after surging 288,000 in June. The unemployment rate is forecast steady at 6.1 percent. (0830/1230) Other key data include the ISM manufacturing survey, which is expected to show an acceleration in factory activity. Auto sales are expected to have moderated a bit from June's brisk pace. (0000/0400) Consumer sentiment is expected to have been little changed in July. (0955/1355) On Thursday, Exxon Mobil, the world's largest publicly traded oil company, is expected to report a jump in second-quarter profit helped by rising natural gas prices and increasing production. ConocoPhillips is due to report second-quarter earnings that were lifted by higher prices for crude oil and will update investors on its effort to grow more lucrative production from North American shale formations including the Eagle Ford in South Texas. Chevron Corp, the second-largest U.S. oil company, is expected to report a jump in second-quarter profit on Friday, as asset sales in Chad and elsewhere offset spiking currency charges.
Procter & Gamble is likely to report fourth-quarter results before the bell on Friday. Net sales in the past two quarters have remained flat, increasing pressure on P&G to launch innovative products and streamline its businesses. Investors will keep an eye on what P&G is doing to improve margins and market shares in its key categories and progress on its 5-year, $10 billion restructuring plan that it announced in February 2012, in order to cut costs by streamlining management, cutting jobs and reducing marketing costs.
United Parcel Service is scheduled to deliver second quarter results on Tuesday. The company should benefit from strong ground shipments and lower costs. Investors will be interested to know the company's plans to handle the peak shipping season in the October-December quarter, especially given that UPS was not well prepared last year and had to spend extra to bring on additional delivery vehicles and manpower to meet the rise in shipments.
The U.S. Federal Reserve's chief policymaking committee meets on Tuesday and Wednesday but there is little expectation its outlook on the economy or policy statement will break new ground. Policymakers will continue work on their plans for winding down the extraordinary monetary policies of the past few years. They will also take the pulse of an economy that has been showing some signs of rising prices and wages. The policy statement will be issued Wednesday afternoon. There is no news conference scheduled after this meeting.
Amgen is looking to bounce back from a disappointing first quarter, when several of its drugs had sales fall short of Wall Street expectations. On Tuesday, the world's largest biotechnology company is expected to report higher second quarter profit and revenue compared with a year earlier, but investors will be looking for signs of a stronger second half and insights into drugs in the pipeline that can replace its older mature medicines.
Over the last three quarters, the Time Warner Cable has steadily slimmed down its video subscribers losses, a trend expected to continue when the company is expected to report second-quarter results on Thursday. The company had said it would increase annual capital expenditure over the next three years to stem subscriber losses and boost revenue. DirecTV is expected to release their second quarter results on Wednesday. However, analysts expect an increase in net subscriber additions in Latin America - the company's largest growth area. Separately, Charter Communications is expected to release their second-quarter results on Thursday.
Apache Corp, which is being targeted by activist investor Jana Partners, is expected to report second-quarter results on Thursday. Investors are keen to see if the U.S. oil and gas company provides any details about its efforts to whittle down its liquefied natural gas holdings as well as its efforts to grow output in the Permian Basin.
Eaton Corp, the U.S. maker of electrical and hydraulic systems is due to report second-quarter results, after narrowing its forecast for the period earlier this month. The company specified several one-time items that brought down operating earnings by 70 cents per share and said, excluding those items, it expected to earn $1.10 to $1.12 per share. Some investors are questioning how Eaton can reach its full-year forecast, according to Sanford Bernstein, so that is primed to be a hot topic on the conference call.
On Thursday, Electric carmaker Tesla Motors is expected to forecast third-quarter and remaining-of-year performance when it reports second quarter earnings after market close and then holds a conference call with investors and reporters, hosted by company leader Elon Musk. Separately, Honda Motor is expected to announce their first-quarter results with Executive Vice President Tetsuo Iwamura briefing reporters on Tuesday.
Kellogg, due to release second quarter results on Thursday, has been battling stiff competition from rivals such as General Mills Inc and cheaper private-label brands. The company has also come under fire from health groups in the U.S. for alleged high sugar content in its cereals for kids like the Honey Smacks. Investors will be keenly watching out for any improvement in sales trends. Separately, Kraft Foods is scheduled to report their second quarter earnings on Wednesday.
California asset manager Franklin Resources is slated to report results for its fiscal third quarter on Wednesday before market. Analysts on average expect the company to earn 95 cents per share, up from 86 cents per share a year earlier. Investors will focus on commentary the company offers for its popular and sometimes-contrarian emerging market bond funds like one run by Michael Hasenstab, who has holds a big position in debt from Ukraine.
Deutsche Bank is scheduled to report their second-quarter results on Tuesday. Also Swiss bank UBS, is expected to report second quarter results. Barclays is expected to report their earnings on Wednesday.
On Wednesday, WellPoint is expected to report earnings for the second quarter. The company has reported numerous issues with the rollout of the exchanges, but has also said that it is profiting from these new customers - in contrast with many competitors. Separately, Humana is scheduled to report second quarter earnings. Separately, Cigna is scheduled to report second quarter earnings on Thursday that is expected to increase. Also, Aetna is expected to report earnings for the second quarter on Tuesday.
On Tuesday, analysts expect a rise in net income on better upstream performance but BP's large exposure in Russia through its nearly 20 percent stake in state-run Rosneft will most likely be the main focus as the EU plans tougher sanctions against Moscow. Separately, Andarko Petroleum is expected to reports its second-quarter earnings and will update investors on its efforts to expand more-profitable shale drilling in formations including the Wattenberg field in Colorado. Separately, National Oilwell Varco is likely to report a higher second-quarter profit, helped by a high number of orders in its rig technology business, its biggest, which makes equipment ranging from blowout preventers to massive floating production platforms.
On Wednesday, Hess Corp is expected to report a drop in second quarter profit after the company sold off some downstream assets to focus more on oil and natural gas production. Separately, Phillips 66 is due to report second quarter earnings that reflect smaller crude discounts. Also, Valero Energy is due to report second-quarter earnings, cautioned profit will fall short of Wall Street estimates on seasonal weakness in its biggest Gulf Coast Market. Separately, Marathon Petroleum Corp, which recently said it will buy Hess Corp's network of gas stations for nearly $3 billion, is due to report second-quarter earnings on Thursday. Occidental Petroleum is expected to report a bigger quarterly profit, helped by higher prices for crude oil and natural gas in the United States.
Sprint is expected to report its second-quarter earnings on Wednesday. The company is expected to report a smaller loss than in the first quarter, as a massive network overhaul which causes dropped calls comes close to an end. Separately, T-Mobile is due to report its second quarter earnings. The company added more subscribers than all its competitors combined last quarter, but still reported a loss. Investors will look to see if the company can post a profit next quarter and continue luring subscribers with its aggressive discounts. Analysts say while the discounts have been instrumental in attracting customers, they are coming at a steep cost to margins and are not sustainable.
On Thursday, CME Group, the largest U.S. futures exchange operator, is set to report quarterly earnings amid a slump in volume. In the second quarter, average daily volume fell 12 percent year from a year earlier as part of a broad slowdown in trading. CME is expected to give investors an update on its first overseas exchange in London, which has seen a slow start since it launched in April.
Twitter's decelerating user growth and user engagement on the service will be in the spotlight when the social media company, expected to report solid second quarter financial results on Tuesday. Shares in the San Francisco company, which had a blockbuster IPO in 2013, have declined by more than 40 percent in the past six months as Wall Street worries that its service may never evolve into a massive, mainstream phenomenon such Facebook, or newer services like Instagram and WhatsApp.
On Tuesday, Marriott International is expected to report better-than-expected second-quarter results as global business travel rose. The company is also likely to report higher RevPAR growth across regions. Investors are likely to look for commentary on the impact of the security situation in parts of Africa where Marriott has a presence and the Ukraine-Russia crisis on occupancy rates in the region. Separately, Hilton, whose brands include Conrad and Waldorf Astoria, is due to report second-quarter results on Friday. The hotelier said in May it expected higher room rates and occupancy to allow it to deliver strong results for the year. Investors will be looking for updates to that forecast.
McGraw Hill Financial, scheduled to release second quarter earnings on Tuesday, is expected to benefit from industry trends such as a reduction in the use of intermediaries to invest in the European market, high emerging market debt issuance and a return of structured investment products. Separately, Ameriprise Financial is scheduled to report its second-quarter earnings results on Tuesday after the market close. Analysts expect the Minneapolis, Minnesota-based company to earn $2 a share, up from $1.69 a share a year earlier. Separately, Japan's Nomura is expected to report their quarterly results.
HCA Holdings, the largest U.S. hospital operator, is expected to report earnings for the second quarter. Investors will be looking for details on the extent to which the Affordable Care Act and the improving economy are driving a rebound in demand for hospital services.
Viacom has said it will file counterclaims against Cablevision Systems Corp when it files its answer to the latter's antitrust lawsuit accusing it of forcing cable providers and subscribers to buy channels they do not want. Cablevision had accused Viacom of using strong-arm tactics, including a threatened $1 billion penalty, to coerce it into paying for 14 low-rated or obscure channels if it also wanted eight "core" channels, including four considered commercially important: BET, Comedy Central, MTV and Nickelodeon. Viacom is expected on July 31 to file its answer to Cablevision's lawsuit, and on July 11 said the answer will include counterclaims.
Corning is expected to report second-quarter results. Investors will focus on outlook on the second half as Samsung Electronics', one of its largest customers, has seen sales drop in the recent past. There are also talks of Apple Inc, a Gorilla glass user, going for rival GT Advanced Technologies' Sapphire glass for it's iPhone 6, expected in September. Shares of GT Advanced Technologies have more than tripled in the past year.
On Tuesday, International Paper, the largest North American producer of corrugated boxes, is expected to report a jump in second-quarter profit, helped by emerging market sales and slowly recovering U.S. demand.
Thomson Reuters is expected to report second quarter results and executives are expected to update investors on the progress of sales to financial clients.
Allstate, the largest listed U.S. home and auto insurer's estimated pre-tax catastrophe loss for the second quarter is expected to be about $936 million. Chief Executive Thomas Wilson had said that Allstate would focus this year on attracting customers to boost its market share rather than go for "abnormally large" price increases.
The main economic data point for Canada next week will be May's gross domestic product report, to be released on Thursday.(0830/1230) The country's economy is forecast to grow at 0.3 percent in the month, a slight uptick from April's performance of 0.1 percent growth. Growth in Canada has been lackluster, with the economy gearing down in the first quarter of the year, but economists are hoping to see a greater pick up in the second quarter. The Bank of Canada said recently that the economy does not yet have enough steam to grow without the central bank's help.
Valeant, trying to take over Botox maker Allergan, is due to report second-quarter results before markets open on Thursday that will see more scrutiny than usual. Valeant has been under attack from Allergan for its acquisition-based business model and will be keen to show that it can produce organic growth and be more transparent in its reporting, two key criticisms by its target. We will also be keen to hear updates on efforts by Allergan shareholder Pershing Square, which supports Valeant's bid, to call a special shareholder meeting and turf most of Allergan's board. Valeant is also hoping to sway shareholder advisory firms ISS and Glass Lewis to recommend the special meeting and/or its bid, and will listen for any update on those efforts.
TransCanada Corp, Canada's No.2 pipeline operator, is expected to report relatively flat second quarter earnings on Thursday. Separately, Enbridge, Canada's largest pipeline operator, is expected to report slightly higher second quarter earnings on Friday.
Goldcorp expected to report flat earnings on the back of a little changed gold price on Thursday. Investors are expected to want an update on Goldcorp's three development projects, Cerro Negro, Eleonore and Cochenour. On Wednesday, Barrick Gold is expected to produce weaker second-quarter results on lower production after the sale of several operations in the past year. Investors will want an update on the restart of Zambian copper mine Lumwana and further details on a recent joint venture transaction signed on the company's Jabal Sayid copper project in Saudi Arabia. Separately, Yamana Gold's second-quarter results, expected to be released after the markets close. Investors will be closely eyeing the results to see if the company can deliver on its full-year guidance. There may also be questions about some of Yamana's newly commissioned South American operations, which have had some teething issues.
Newmont Mining is scheduled to report its financial results for the second quarter. The gold and copper miner has suspended its Indonesian operations and filed for international arbitration against the government after a months-long dispute that halted its concentrate exports from the country. Investors will be looking for signs Newmont can solve the dispute as Freeport, the other major U.S. miner with operations in Indonesia, assures its own investors that it expects to restart exports very soon.
Talisman Energy, one of Canada's largest independent oil companies, is expected to report higher second quarter earnings on Tuesday. But analysts and investors will be more interested in the Calgary-based company's talks with Repsol, after Talisman said it had been approached by the Spanish company regarding "various transactions".
On Wednesday data will show Mexico's fiscal balance for June after the country notched a 42.2 billion peso deficit in May as spending rose and tax and oil revenues fell. (0900/1300) On Friday PMI data for July will show whether Mexican factor sentiment continued to dip after ticking down to 51.8 in June. (1030/1430) A survey of analysts by the central bank released on the same day will reveal whether analysts continued to lower their forecasts for Mexican growth and inflation this year, after the IMF cut its forecast for economic expansion in Mexico in 2014 to 2.4 from 3.0 last (this) week.
BBVA, Spain's second-biggest bank is scheduled to release second-quarter earnings on Wednesday. The lender is one of the most exposed in Spain to emerging markets volatility. Investors will also be looking at how its key Mexican unit is performing and whether the domestic turnaround is improving. Separately, Banco Popular is expected to report second-quarter results. Popular has been one of the more acquisitive banks of late, and bought a retail banking network from Citigroup.
Phosphate and potash producer Mosaic is expected to report second quarter results on Thursday that likely were pressured by soft prices. Of interest will be an update in the health of CEO Jim Prokopanko, who took a leave to fight cancer and any update on the company's plans to cut costs.
Israel-based Mobileye NV, backed by Goldman Sachs Group Inc, Fidelity Investments and BlackRock, expects to price a U.S. initial public offering of ordinary shares at $17-$19 each on Friday. The IPO is expected to raise up to $527.3 million and the company is expected to be valued at about $4 billion at the higher end of the IPO price. Mobileye makes collision-avoidance software and equipments that are used in more than 3 million vehicles made by the likes of BMW and General Motors.
Blackstone Group-backed Catalent's initial public offering is expected to be priced between $19 and $22 per share on Thursday, valuing the health technology company at about $2.57 billion at the top end. The company provides advanced delivery technologies for drugs, biologics and consumer health products. Catalent's IPO of 42.5 million shares is expected to raise about $935 million at the top end of the price range. Separately, Transocean Partners IPO is expected to raise about $368 million, valuing the company at up to $1.45 billion. The company reported a jump of 75 percent in its net income to $63 million for the quarter ended March 31.
MONDAY 28th Cummins, the U.S. maker of engines, turbines and automotive components, is scheduled to report and is benefiting from the rebound in North American truck production. But the company is also highly exposed to emerging markets, which are showing signs of softness.
Herbalife, expected to report second quarter results, raised its full-year profit outlook in April on the back of strong sales of its daily consumable products such as energy drinks and multi-vitamin tablets. Looking for details on whether the company plans to pursue a lawsuit against Billionaire investor William Ackman, which it said was an option, and whether it plans more measures like the share buyback announced in April to shore up investor confidence.
Federal Reserve Bank of Dallas is scheduled to release their Texas Manufacturing Output Index for July. (1030/1430) Separately, the National Association of Relators is expected to issue their Pending Home Sales for June. (1000/1400) Also, Markit is expected to release the United States-Markit services Flash preliminary numbers for July. (0945/1345) Ryanair, Europe's biggest budget airline is expected to report results having told Reuters in mid-July that it has no plans to cut its profit forecast for the current financial year despite warnings by rivals Air France-KLM and Lufthansa. Separately, Mexican infrastructure construction company ICA is scheduled to report second-quarter results.
Meat and poultry producer Tyson Foods is expected to report third-quarter results. Two topics are likely to dominate Tyson's quarterly conference call with investors: Its $7.7billion offer to buy U.S. sausage seller Hillshire Brands and chicken demand in China after yet another food safety scare there.
Brazil's central bank is scheduled to release results of a weekly economic survey with more than 100 financial institutions. This will include forecasts for GDP, interest rates and inflation rates.
(Compiled By Nandi Kaul)
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