(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) Citigroup reports fourth-quarter results. In what some analysts have called a “kitchen sink quarter,” the bank is expected to report a tiny profit as it loads up on expenses to throw out costly business processes and settle legal claims. CEO Mike Corbat warned in December that Citi would take $3.5 billion in charges in the quarter and barely break even. Analysts are expected to press him on whether he will win approval in March from the Federal Reserve to spend more on dividends and stock buybacks and then meet 2015 targets for profits and efficiency. Bank of America Corp also reports. After reaching a nearly $17 billion settlement with regulators in the third quarter, the second largest U.S. bank is set to report earnings without the overhang of big legal costs for the first time since the financial crisis. But management has already told investors to temper their expectations because of lower bond trading revenue.
As part of parent Bank of America’s earnings report, Merrill Lynch, the No. 2 U.S. retail brokerage as measured by its almost 14,000 advisers, releases data on its slowly growing sales force, asset-gathering campaign and profitability. The figures should cast some light on whether critics who say Merrill is losing confidence of its sales force stand any ground.
Intel Corp is expected to report fourth-quarter results largely in line with analysts’ expectations, according to Thomson Reuters StarMine. Investors will look for new signs of personal computer demand to justify the chipmaker’s strong stock gains over the past year. Under CEO Brian Krzanich, Intel made meaningful inroads with its tablet chips in 2014 but at a heavy cost to profitability that many on Wall Street are not keen to see continue. The company is also extending its push into smart wearable gadgets - nascent markets that the chipmaker and other technology companies hope will fuel growth as demand for smartphones and tablets loses steam. Schlumberger, world’s No.1 oilfield services provider, is expected to report a higher quarterly profit, helped by growth in its Middle East and Asia Pacific operations. A majority of analysts covering the stock have cut their earnings estimate by an average of 6 percent over the past month. Schlumberger, which provides drilling technology and equipment, said in early December that it would take a $1 billion charge in the quarter related to job cuts and the write-down of some seismic vessels as it responds to a slump in oil prices since June.
Asset manager BlackRock Inc, which historically has focued on instititions, is likely to show it has made big inroads with retail investors despite struggles with its active equity funds.
Lennar Corp is expected to report higher quarterly profit and revenue for the fourth quarter, as it sold more homes at higher prices. Faster economic growth and an improving job market are likely to have benefited the second-largest U.S. homebuilder, which mainly caters to move-up buyers. Investors will be looking for comments on the impact of the Federal Housing Administration’s recent reduction in annual mortgage insurance premiums and lower gasoline prices, which will reduce commuting costs to new home communities. A Labor Department report is expected to show that lower gasoline prices helped to push the producer price index down 0.4 percent in December after it fell 0.2 percent in November (0830/1330). The Labor Department releases weekly data for initial jobless claims and continued jobless claims. (0830/1330)
Federal Reserve Banks of New York, Atlanta, Cleveland and Philadelphia release findings from a joint regional survey on small business credit conditions. Separately, the New York Fed releases its Empire State Manufacturing Survey for January. The index fell to 3.58 in December, turning negative for the first time in two years (0830/1330). Federal Reserve Bank of Philadelphia will issue its Business Outlook Survey for January assessing factory activity in the U.S. mid-Atlantic region. (1000/1500)
Brazil’s central bank releases its IBC-Br index of economic activity, a monthly proxy for gross domestic product data, for November. (0530/1030) Peru releases data on economic activity for November. The country’s finance minister has said November’s growth rate could be slower than the 2.37 percent year-on-year expansion posted in October (1100/1600). Central Bank of Chile meets to decide the benchmark interest rate. Analysts expect the bank to hold the rate unchanged at 3 percent. (1600/2100) (Compiled By Astha Rawat in Bengaluru; Edited by Maju Samuel)