What to Watch in the Week Ahead and on Monday, Sept. 8
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Markets face a relatively quiet week in terms of economic news and await the Federal Reserve's meeting a week after. But the general trends that have been in place remain constant - expectations are for the dollar to continue its strengthening path, for bond yields to remain low as investors find U.S. rates favorable against falling European yields, and for the stock market to stagnate, albeit not far from all-time records reached earlier in the month.
The week is quiet on the data front with only retail sales being key data scheduled for release. The Commerce Department is expected to report on Friday that retail sales increased 0.6 percent in August, driven by robust automobile sales, after being flat in July. Core retail sales, a gauge of consumer spending, are expected to have risen 0.3 percent after July's 0.1 percent gain. Weekly jobless claims data on Thursday will be watched for confirmation that a sharp slowdown in job growth in August was an aberration.
Apple had better have a surprise up its sleeve for investors and technogeeks this time round, beyond such well-telegraphed "technological advances" like a bigger or sapphire-coated screen, or even a mystery smartwatch. Executives have stirred up expectations by hyping a supposedly great pipeline all year. Now, at a "special event" in Cupertino on Tuesday, investors get to see if the company that hasn't presented a new product since the 2010 iPad can live up to its promises. After years of decline, demand for PCs is showing signs of health. But at PC chipmaker Intel's annual developer conference on Tuesday, CEO Brian Krzanich will be expected to show more signs of progress in chips for tablets, a market he promised to expand into aggressively in 2014. In his keynote speech, Krzanich is also expected to talk up new chips aimed at smart wristbands and other wearable computing gadgets.
The three-day Barclays Global Financial Services Conference, which begins on Monday, is scheduled to have JPMorgan Chase CFO Marianne Lake speaking on Tuesday. She is likely to give an early indication of the biggest U.S. bank's third-quarter results when she speaks. Wells Fargo CFO John Shrewsberry and Bank of America CFO Bruce Thompson speak on Wednesday. Wells Fargo, the fourth-largest U.S. bank, has previously used the occasion to give a glimpse of its third-quarter earnings and this will be the first time an executive from the Bank of America will speak publicly following the bank's $16.65 billion settlement with the U.S. government.
Food costs will be in focus when Kroger, the biggest U.S. supermarket operator, reports first-quarter results on Thursday. The company has been outperforming rivals and giving Wal-Mart Stores, which sells more groceries than any other retailer, a run for its money.
On Tuesday, a group of speakers testify before a Senate Banking Committee hearing, "Wall Street Reform: Assessing and Enhancing the Financial Regulatory System," in Washington. The speakers include Federal Reserve Board Governor Daniel Tarullo; chairman of the Federal Deposit Insurance Corporation Martin Gruenberg; Thomas Curry, comptroller of the currency, Office of the Comptroller of the Currency; Richard Cordray, director, Consumer Financial Protection Bureau; Mary Jo White, chair, U.S. Securities and Exchange Commission; and Timothy Massad, chairman, U.S. Commodity Futures Trading Commission. When it reports results on Tuesday, book store operator Barnes and Noble's first-quarter loss is likely to be bigger than analysts' expectations, according to StarMine. The company said in June it would spin off its Nook tablets and college books business, letting go of the loss-making Nook e-reader business to focus on its book stores. The core book business was likely to have remained under pressure in the quarter as book prices and book store sales fell. The company had forecast full-year bookstore sales to drop in the low-single-digit range in percentage terms. Cyber-security software maker Palo Alto Networks is likely to report a better-than-expected quarterly profit on Tuesday, according to StarMine. Analysts say the company added customers and gained market share from rivals such as Cisco, Fortinet and Check Point in the quarter due to strong demand for its "WildFire" firewall product. Electronics chain Radioshack is expected to report, on Wednesday, its tenth straight quarterly loss as it struggles to compete against rivals such as Amazon and Best Buy and with the general weakness in the consumer electronics industry. The company has been on the brink of bankruptcy for months but has stayed afloat, helped by turnaround efforts and some capital infusion from investors such as hedge fund Standard General LP. Investors will be keeping an eye out for the company's cash position and will be looking for updates on measures to stanch losses and boost sales. They will also look for comments on any additional financing commitments and signs of a turnaround under CEO and restructuring expert, Joe Magnacca. The National Association of Manufacturers holds a media teleconference call on Wednesday to release findings of a new macroeconomic study on the annual cost of federal regulations on the U.S. economy, manufacturers and small businesses. The study estimates the cumulative burdens of federal regulatory compliance across major business sectors and among firms of different sizes, providing a clear indication of the extent to which smaller firms are impacted. The participants from NAM are President and CEO Jay Timmons, Chief Economist Chad Moutray, NAM. There will be two participants from Lafayette College: W. Mark Crain, Professor of Political Economy and Nicole V. Crain, Professor of Economics. Statistics Canada releases capacity utilization data for the second quarter on Wednesday and the new housing price index for July on Thursday. Strength in oil and gas extraction and in mining helped push the Canadian industries' capacity utilization rate up to 82.5 percent in the first quarter of 2014, while new housing prices in Canada rose 0.2 percent in June from May. Also, Canada Mortgage and Housing Corp releases housing starts data for August on Tuesday. The seasonally adjusted annualized rate of housing starts rose to 200,098 in July. The Teranet-National Bank Composite House Price Index for August is scheduled for release on Friday. On Tuesday, data will show whether Mexico's inflation in August continued to stray above the central bank's 4 percent ceiling, after reaching 4.07 percent in July. Gross fixed investment data on Wednesday will show how this indicator fared in June, after the measure expanded at 0.5 percent in May, month on month. Also on Wednesday, Mexico's Finance Minister will explain the new 2015 budget before Congress. Data on Thursday will reveal how industrial production fared in July, after unexpectedly shrinking in June in its first contraction since December. MONDAY, SEPTEMBER 8 The three-day Barclays Global Financial Services Conference kicks off in New York, with speakers including Citigroup CFO John Gerspach and BlackRock President Rob Kapito. Gerspach may provide early clues to the bank's third-quarter performance and an update on plans to sell its Japanese consumer bank when he speaks. Campbell Soup Co reports fourth-quarter earnings before the bell. Wall Street on average are expecting sales of $1.87 billion and earnings of 50 cents per share. The company, which owns brands like Pepperidge Farm and Arnott's in addition to Campbell's soup, is facing a slowdown in some of its largest snacking categories like cookies and crackers. Statistics Canada releases building permits data for July. The value of Canadian building permits issued in June unexpectedly jumped by 13.5 percent on higher construction intentions in the province of Quebec. Analysts expect a 10 percent month-on-month decline in July (0830/1230). 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. Separately, Chile gives inflation statistics for August. The data will be closely watched for any sign that it is beginning to tail off after several months of registering above the central bank's target range (0800/1200). (Compiled by Ayesha Sruti Ahmed in Bangalore; Editing by Savio D'Souza)
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