What to Watch in the Week Ahead and on Tuesday, Feb. 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) Week Ahead Equities could build on Friday gains, if investors like what they see in a slew of economic releases, including Federal Reserve minutes, producer prices, industrial output and several housing reports. When Wal-Mart reports earnings on Thursday, it will be viewed as an indicator of what is to come from other retailers and where consumer spending went at the end of 2014. Oil will be an issue as several mid-cap energy firms that have struggled with falling crude prices will also report earnings and show signs of stability - or not. The big event next week for the bond market is the release of the latest Fed minutes, and bonds could end up pushed and pulled as the economic data unfolds. Inflation watchers will look for the U.S. 30-year TIPS auction next Thursday. If Greek talks with eurozone finance ministers - continuing next week - prove fruitful, the euro could rally. Wal-Mart Stores Inc, the world's largest retailer, will report fourth-quarter results before the bell on Thursday. The company in November warned it was preparing for a bruising holiday season as it moved to match prices with online outlets. Wal-Mart also lowered the top end of its full-year profit forecast to $5.02 per share from $5.15, partly citing expectations of a highly competitive holiday season. Actavis Plc, the company soon to buy Allergan, is expected to announce higher fourth-quarter earnings on Wednesday. Earnings are expected to have increased due to acquisitions by CEO Brent Saunders, who took the top spot after the company bought Forest Labs last year and secured the acquisition of Botox maker Allergan. On Wednesday, Duke Energy Corp, the largest U.S. power company by market value, is expected to report a lower fourth-quarter profit as it grappled with costs. The company has been retiring coal plants to comply with U.S. environmental regulations and also selling unregulated power assets to avert pricing uncertainties. Investors will be looking for details on the company's cost-cut initiatives and future of demand and pricing. Satellite TV provider DIRECTV is expected to report on Thursday fourth-quarter revenue below analysts' estimate, according to Thomson Reuters StarMine data, as it continues to lose U.S. subscribers. The company is bleeding customers as rivals like Time Warner Cable attract subscribers by bundling their offering with Internet and phone connections. Oil and natural gas producer EOG Resources Inc, a major player in North Dakota's Bakken shale formation, is expected to report a drop in fourth-quarter profit on Wednesday amid tumbling crude prices. On Thursday, U.S. Securities and Exchange Commission, under pressure from outside forces and commissioners, holds a roundtable on the proxy voting process. The first panel will focus on the state of contested director elections and whether changes should be made to the federal proxy rules to facilitate the use of universal proxy ballots by management and proxy contestants. This panel also will discuss the state law, logistical and disclosure issues presented by a possible universal proxy ballot process. The second panel will focus on strategies for increasing retail shareholder participation in the proxy process. This panel will discuss how technology - by providing better access to information or easier means of voting - might affect retail participation. In addition, this panel will discuss whether the format of disclosure could be improved to increase the engagement of shareholders and how the mechanics of voting could be improved to affect retail shareholder participation. Shareholder rights activist James McRitchie, who has been at the heart of a fight with Whole Foods over proxy access, will be among the speakers. The world's largest farm equipment maker, Deere & Co, is expected to report lower revenue and profit for the first quarter on Friday. Falling grain prices have prompted farmers to cut capital expenditure and this is resulting in lower income for Deere. A record corn harvest in North America has pulled down corn prices and that will continue to hurt demand for Deere's tractors and harvesters, analysts said. The slowdown in South America, particularly Brazil, will also hurt income in the quarter. Investors will be looking for an update on 2015 forecast. Hilton Worldwide Holdings Inc, the owner of Waldorf Astoria and Conrad luxury hotel brands, is expected to post higher revenue and profit for the fourth-quarter on Wednesday, helped by a rise in business travel in the United States. Unlike rival Starwood Hotels, which has nearly half of its rooms outside North America, Hilton operates about 76 percent of its rooms within the United States, and is expected to be less affected by a strong dollar. Investors will look for comments on 2015 forecast and how a probable decline in inbound travel due to a strengthening dollar might impact its key markets, such as New York, Honolulu, in the United States. TurboTax software maker Intuit Inc's second-quarter profit is expected to beat estimates on Thursday, according to Thomson Reuters StarMine data. Up to Feb. 6, the self-prepared e-file category, which correlates with Intuit's tax preparation software, rose 7.1 percent, compared with last year's full season growth of 6 percent, according to the Internal Revenue Service. Intuit temporarily stopped transmitting state returns last week after noticing attempts to use fraudulent identification information. The company gets most of its profit in its second and third quarters, when Americans are more likely to buy its software in the lead-up to the tax season. On Wednesday, Marriott International Inc, owner of the Marriott and Ritz-Carlton hotel brands, is expected to report higher fourth-quarter profit as business travel rose and it raised room rates. Marriott is less affected by a strong dollar, as a large percentage of its hotels are in the United States. Investors will watch for comments on any plans to spin off the company's time-share business following a similar move by Starwood Hotels & Resorts Worldwide last week. Nordstrom Inc, the upscale department store operator, is likely to report fourth-quarter profit above analysts' estimates on Thursday, according to Thomson Reuters StarMine data. The company will be the first among department store operators to report results for the holiday quarter, though rivals Macy's and Kohl's estimated strong same-store sales for the holiday quarter. The holiday quarter is estimated to have been good for department stores with few unplanned promotions. As a result, lesser inventory left for clearance sales in January is likely to have helped margins but resulted in lower sales in the month. Investors will be looking out for comments on the West Coast port disruptions and likely implication for the company which has 43 percent of its distribution centers on the West Coast. On Thursday, Discovery Communications Inc, the owner of channels such as Animal Planet and Discovery Channel is expected to report a fourth-quarter profit and revenue below Wall Street expectations, according to Thomson Reuters StarMine data. The company, which gets more than half its revenue from outside the United States, has been hurt by the strengthening of the dollar. Weaker U.S. cable viewership and lower-than-expected ratings are also expected to weigh on Discovery's results. On Thursday, chipmaker Marvell Technology Group Ltd is expected to report revenue for the fourth-quarter marginally above estimates, according to Thomson Reuters StarMine data, as sales of its higher margin 4G LTE chips failed to offset weak demand for its chips used in third-generation mobile communication. Marvell has been investing heavily in fourth-generation LTE chips (4G) to keep pace with the expansion of high-speed networks in China and the United States. The company has been bearing the brunt of weakness at its biggest customer, Samsung Electronics Co Ltd, which is facing immense pressure to hang on to its market share after it posted a plunge in quarterly mobile earnings this quarter. Navigation device maker Garmin Ltd is expected to report better-than-expected fourth-quarter profit on Wednesday, according to Thomson Reuters StarMine data. The company had raised its full-year proforma earnings forecast citing increasing sales in its fitness and aviation businesses, helping offset falling sales in personal navigation devices, its largest business. Analysts will be looking for information on new products and guidance. Chemical maker Huntsman Corp is expected to report a fall in fourth-quarter profit on Wednesday, hurt by lower titanium dioxide (tio2) prices and foreign exchange headwinds. Huntsman said it would reduce tio2 capacity by 13 percent in its European unit to generate annual savings of about $35 million. The company cut about 900 jobs in December and said it would reduce capacity at its titanium dioxide business under a broader restructuring program. Investors will be keeping an eye on cost cutting efforts and whether the company's margins have benefited from the 50 percent decline in global oil prices. SolarCity Corp, the top U.S. solar installer, announces results for the fourth quarter after the bell on Wednesday. SolarCity is backed by Tesla Motors CEO Elon Musk and is growing rapidly due to strong state and federal support for solar power. Largest independent brokerage firm, LPL Financial Holdings Inc, with some 12,000 brokers that buy its regulatory services and products, reports fourth-quarter results on Thursday that should show revenue gains from a frothy market. But investors will be looking at whether its expenses are coming under control as the firm enters the final stages of a risk management system overhaul mandated by regulators and as it continues to pay bonuses to capture new broker clients. Toy retailer Build-A-Bear Workshop Inc will report fourth-quarter results before the bell on Thursday. The company last month estimated fourth-quarter revenue higher-than analysts' expectations, citing product launches, marketing programs and higher sales of gift cards. Comparable-store sales is set to rise 9.8 percent in the holiday quarter, including an 8.5 percent increase in North America and a 14 percent rise in Europe, Build-A-Bear said. On Wednesday, the initial public offering of Wowo Ltd, the operator of Chinese daily deal website 55tuan.com is expected to raise $66 million, valuing the company at up to $423 million. The website offers deals on restaurants, movie theaters and beauty salons. Wowo offers deals from more than 2,000 local merchants and target customers in nearly 150 major Chinese cities. The company had 17.3 million active mobile users on Wowo Mobile App, a service for real-time, location-based interaction through mobile devices. Wowo filed for an IPO in the U.S. in 2011, but later withdrew the offering. The company's revenue has more than tripled between 2011-2013. Wowo is the first Chinese company to list in the United States in 2015. On Wednesday, Statistics Canada releases wholesale sales number for December. It decreased by 0.3 percent in November, following gains in the previous two months. On Friday, the retail sales figure is likely to have decreased 0.4 percent in the month of December. On Thursday, Deputy Governor Agathe Cote addresses the Quebec Technology Association in Mont Tremblant, Quebec. Also, on the same day, Admiral Michael Rogers, the head of the U.S. National Security Agency and commander of U.S. Cyber Command, will give a speech at a time when there is increasing focus on the Obama administration to reveal what it knows about hacking campaigns such as the one which struck Sony Pictures. Mexico's central bank is expected to revise its growth forecast of 3-4 percent for this year in its quarterly inflation report on Wednesday. On Friday, the national statistics institute releases GDP data for the fourth quarter of 2014 and the full year period. Also on Friday, growth activity data for December will be released, after the measure reached 0.49 percent in November. Tuesday, Feb. 17 Medical device-maker Medtronic Plc is expected to report quarterly profit a little below analyst estimates, as the company completes its acquisition of Covidien Plc with new management in place. When the company will announce its results for the fourth quarter, analysts and investors will be looking for guidance from the company on the acquisition and financials expectations for the year ahead. While sales of its heart devices are expected to remain stable, any potential impact of a strong dollar on nearly one third of its revenue from international sales is yet to be seen. U.S. fertilizer producer CF Industries Holdings Inc reports fourth-quarter results after markets close. Of interest will be progress on the company's $3.8 billion expansion of nitrogen fertilizer capacity in Iowa and Louisiana. Investors expect a less profitable fourth quarter, due to a shorter opportunity last fall for US farmers to spread fertilizer before winter. U.S. tire maker Goodyear Tire & Rubber Co, which gets more than two-third of its unit sales from replacement tires, is expected to report lower sales and profit for the fourth-quarter, hurt by a "warmer than expected" winter. A stronger dollar is also expected to hurt the company's revenue, more than half of which is generated outside North America. Investors will be looking for comments on 2015 forecast and how lower raw material costs, and the devaluation of Venezuelan currency, a market which is a significant contributor to sales for the company's Latin America segment, will impact financial performance in the year. Prominent fund managers ranging from David Einhorn to John Paulson reveal in regulatory filings what publicly traded U.S. stocks they owned at the end of the fourth quarter and shed light on where they may be positioning themselves for the new year. The so-called 13-F filings are closely watched in the investment industry for hints on how highly secretive hedge funds, which rarely talk about their holdings, were positioned in some of the country's biggest stocks at a time investors are preparing for the Federal Reserve to begin tightening interest rates later this year and as investors adjust to lower oil prices. Federal Reserve Bank of Philadelphia President Charles Plosser speaks on the economic outlook and monetary policy before the Union League of Philadelphia. (1245/1745) Walter Energy Inc, the coal miner is expected to report a bigger fourth-quarter loss, hurt by falling prices due to a global supply glut and weak demand for steel-making coal from China. Consistent with trends in the sector, Walter Energy suspended its divided in January, as coal miners are reining in expenses and slashing dividends to make up for coal prices that have remained low for at least two years. Statistics Canada releases December data of foreign investment in Canadian securities, which fell to C$4.29 billion in November. (0830/1330) (U.S. markets are closed on Monday, Feb.16, in observance of U.S. Presidents' Day) (Compiled by Sourav Bose in Bengaluru; Editing by Sriraj Kalluvila and Joyjeet Das)
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