What to Watch in the Day Ahead - Thursday, Dec 17
(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) New applications for U.S. unemployment benefits likely fell last week, pointing to a steadily firming labor market. According to a Reuters survey of economists, initial claims for state jobless benefits probably slipped to 275,000 from 282,000. (0830/1330) Meanwhile, the Commerce Department will issue current account data for the third quarter. The current account deficit, which measures the flow of goods, services and investments into and out of the country, is expected to have expanded to $118.0 billion from $109.7 billion in the second quarter. (0830/1330) Consulting and outsourcing services provider Accenture Plc is expected to report first-quarter earnings slightly above analysts' estimates, according to Thomson Reuters StarMine. The company is likely to have benefited from growth in its high-margin consulting business, particularly in North America. Investors will focus on the company's full-year outlook as rival Infosys trimmed its full-year dollar revenue forecast in October. General Mills Inc, maker of Cheerios cereal and Betty Crocker cake mixes, is expected to report second-quarter profit slightly above analysts' average estimate, according to Thomson Reuters StarMine. The company said this month it completed the sale of Green Giant frozen foods and Le Sueur canned vegetables brands to snack food maker B&G Foods. General Mills, which plans on closing facilities in the UK and New Zealand, has said it will remove artificial colors and flavors from its cereals and also offer gluten-free cereals as part of a plan to boost sales of natural and organic foods. Investors will look out for further divestitures or acquisitions and the company's plans to bring down costs. Drugstore operator Rite Aid Corp reports third-quarter results. Rite Aid in October agreed to be acquired by Walgreens Boots Alliance for $9.4 billion, combining two of the three biggest U.S. drugstore operators. Rite Aid in September cut its full-year forecasts for total earnings and drugstore sales, citing lower pharmacy reimbursements and expenses related to its $2 billion-acquisition of pharmacy benefit manager EnvisionRx. Analysts will be looking for updates on the deal, which is likely to face tough antitrust scrutiny, and comments on pressure from low pharmacy reimbursement rates as generic drug prices go up. Largest U.S. motorhome maker Winnebago Industries Inc is expected to report a slight rise in first-quarter revenue as RV shipments rise. However, profit is expected to be flat. Investors will be looking to see if the company was able to contain its expenses it has been incurring due to worker shortage and comments on its financial forecast for the current quarter. The company has also been facing lower prices for motorhomes, hurting its margins. Delta Air Lines Inc, the third-largest U.S. airline, hosts its annual investor day in New York. While Delta has offset its tax payments for years thanks to operating losses a decade ago, it will have to pay its effective tax rate of about 38 percent in cash likely after 2017. Analysts expect Delta to outline plans to lower this rate, potentially through off-shoring profits it shares with foreign airline partners such as Air France-KLM SA and Virgin Atlantic Airways Ltd. A move to pay fewer taxes could spark a U.S. political backlash, a year after the Obama administration made it tougher for businesses to reincorporate abroad and realize the tax benefits of doing so. Brazil's unemployment rate probably continued to increase in November as the recession sinks in. It is expected to have increased to 8.0 percent from 7.9 percent in October. Separately, Mexico's central bank will release its benchmark rates. Investors will be interested in how Banco de Mexico will move on key rates, which was at a record low of 3 percent, after the U.S. Federal Reserve's stance on interest rate hike. Meanwhile, Chile's central bank meets to decide the benchmark rate. The market is split on whether the bank will raise rates by 25 basis points to contain inflation or leave easing in place to stimulate the still flagging economy. Brazil central bank president, Alexandre Tombini, and the other members of the board will meet for a year-end gathering. Tombini may use the meeting to send a message to markets at a time when most investors expect policymakers to end a short pause and raise rates again in January. The Bank of Japan is widely expected to keep monetary policy steady at the two-day rate review ending on Friday. Investors will be interested in how the Fed's rate decision could affect BOJ policy and its outlook on Japan's economy. LIVECHAT: CURRENCY MARKETS with Ilya Spivak, currency analyst, Daily FX and LOCK, STOCK AND BARREL - OIL MARKETS with Amanda Cooper Ilya Spivak, currency analyst at Daily FX, joins to discuss the outlook for FX markets in the wake of the Federal Reserve's interest rate decision and as the trading year draws to a close. (0500/1000) Separately, join former Global Markets Forum (GMF) editor Amanda Cooper for a quick weekly round up of the main themes driving oil markets. (0900/1400) To join the GMF, click here bit.ly/1kTxdKD (Compiled by Sourav Bose in Bengaluru; Editing by Savio D'Souza)
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