What to Watch in the Week Ahead and on Monday, Sept 21
(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) WEEKAHEAD The markets go into the week shaking their heads, as there are plenty who would say the Federal Reserve needed to keep rates unchanged due to the data, while the equity market now seems to face new levels of uncertainty because of the Fed's now unclear view on what would cause it to lift rates. Short-dated bond yields could dip a bit more, which could boost dividend-paying names, while the dollar may soften further, as investors shift their outlook for rate increases to later in 2015 or even 2016. Federal Reserve Chair Janet Yellen presents on Thursday at the University of Massachusetts Amherst's Department of Economics annual Philip Gamble Memorial Lecture, titled "Inflation Dynamics and Monetary Policy". Separately, Federal Reserve Bank of Atlanta President Dennis Lockhart speaks before the Alabama World Affairs Council on Tuesday. On Wednesday, Lockhart also speaks before the Columbus Rotary Club. On Friday, the Federal Reserve Bank of St. Louis President James Bullard participates in a discussion on "New Directions in Monetary Policy" before the Global Interdependence Center (GIC)/ Federal Reserve Bank of St. Louis "Central Banking Series: St. Louis. On the same day, the Federal Reserve Bank of Kansas City President Esther George speaks on economic conditions and monetary policy before the AKSARBEN Business Luncheon. Nike Inc, the world's largest sportswear maker, on Thursday is expected to report first-quarter profit and sales above analysts average estimate. The beat is expected to be driven by higher pricing in North America, growth in China, and strong sales at its higher-margin direct-to-consumer channel. New footwear launches in the basketball, running and sports categories are also helping migrate customers toward higher-priced products, while the popularity of the "athleisure" trend is driving athletic apparel sales. Investors will look for Nike's updates to its full-year forecast and its comments on new launches and the overall footwear industry. The U.S. Commerce Department on Friday releases the final reading of gross domestic product for the second quarter. The U.S. economy is expected to have expanded at an annual pace of 3.8 percent, instead of the 3.7 percent rate reported last month. Also on the same day, the University of Michigan's final figure on the overall index on consumer sentiment is expected to rise to 87 in September, compared with the preliminary reading of 85.7. Separately, financial data firm Markit issues its preliminary number of Manufacturing Purchasing Managers' Index for September on Wednesday. The Commerce Department, on the same day, will release data for non-defense capital goods orders, excluding aircraft, a closely watched proxy for business spending plans. The U.S. Federal Housing Finance Agency home price index is due on Tuesday. Consulting and outsourcing firm Accenture Plc reports its fourth-quarter results on Thursday. The company is expected to benefit from continued strong demand for its services from North American clients. In June the company raised its full-year revenue forecast for the third time, reflecting rising demand for its services from firms looking to cut costs. Investors will look for details on Accenture's digital business, which offers analytics, content management, social media and cloud services among others. Carnival Corp, the world's largest cruise ship operator, on Tuesday is expected to report third-quarter revenue below analysts average estimate. The company, which had to recently abandon a seven-day trip across the Caribbean due to a fire on board its ship, had said a stronger dollar and rising fuel costs would hurt profit in the latest quarter. The company's guests have been spending more onboard, but the strength of the dollar has cost Carnival the benefits of this trend. Investors will watch for updates to the company's full-year forecast and details on the fire. General Mills Inc is likely to report first-quarter profit above analysts average estimate on Tuesday. The maker of Cheerios cereal and Betty Crocker cake mixes said this month it will sell its Green Giant frozen foods and Le Sueur canned vegetables brands to snack food maker B&G Foods for about $765 million. General Mills has said it will remove artificial colors and flavors from its cereals and also offer gluten-free cereals as part of a wider plan to grow sales of natural and organic foods. Investors will look for further divestitures or acquisitions of the company's product portfolio and its plans to bring down costs. ConAgra Foods Inc, the maker of Slim Jim beef jerky and Chef Boyardee pasta, on Tuesday is likely to report first-quarter sales below analysts average estimate. The company said last June it is planning to exit its struggling private label foods business. ConAgra, which added two Jana Partners nominees to its board in July, is likely to give an update on the auction of the private label business. Investors will also keep an eye on the health of the company's consumer foods business, where, in the fourth quarter, sales grew for the first time in two years. Darden Restaurants Inc on Tuesday is expected to report first-quarter revenue above analysts average estimate. The owner of Olive Garden and LongHorn Steakhouse restaurant chains plans to separate some of its restaurants into a publicly traded REIT. But the IRS's recent decision to be more stringent in ruling such spin-offs tax-free may cause some concern for the company. Darden, under its new board led by activist investor Starboard, has been cutting costs and improving menu options to bring back customers. While the company had previously cut back on promotions at Olive Garden, investors will likely watch out for any signs of an uptick in promotions and the impact to margins, as well as any updates on its efforts to form a REIT. Senior executives of Potash Corp, Agrium Inc, CF Industries Holdings Inc and Mosaic Co speak separately on Tuesday to investors at a Scotiabank conference in Toronto. Of interest are comments by Potash Corp on its pursuit of rival K+S, and thoughts on strategy from Mosaic CEO Joc O'Rourke, who is less than two months into his job. Agrium may also be asked about an unconfirmed report that it may sell its Australian retail business, Landmark. On Wednesday, Mexico's retail sales data for July and the GDP proxy for the same month on Thursday will give an idea how the country's third-quarter economy is holding up after picking up speed in the second quarter. Inflation data for the first half of September on Thursday will show if the pace of consumer prices is holding at a record low despite deep losses in the peso that have pushed up import prices. ON MONDAY, SEPTEMBER 21 The National Association of Realtors releases U.S. home resales data for August. Existing home sales are expected to have dropped 1.3 percent last month after rising to an eight-year high in the previous month. (1000/1400) Red Hat Inc, the world's largest commercial distributor of the Linux operating system, is expected to report second-quarter profit marginally above analysts average estimates. Analysts and investors will be watching out for the company's billings, a closely watched metric. Red Hat gives away its open-source software for free and makes money by selling subscriptions for support and training services. It has benefited from higher demand from businesses for its software used in data-centers and cloud computing. Lennar Corp, the second largest U.S. homebuilder, is expected to report a higher quarterly revenue and profit for the third quarter, as it sold more homes at higher prices. Lennar has a high exposure to Houston, which accounted for about 10 percent of its total homebuilding revenue in 2014. Investors will look for any comments on the impact of falling oil prices in Houston and an update on 2015 forecast. Federal Reserve Bank of Atlanta President Dennis Lockhart speaks before the Buckhead Rotary Club. (1300/1700) Bank of Canada Governor Stephen Poloz will give a speech in Calgary on "Riding the Commodity Cycle: Resources and The Canadian Economy". Analysts will be searching for clues as to how the central bank sees the economy progressing ahead of its next interest rate decision in October. Statistics Canada issues wholesale trade data for July. The value of wholesale trade is expected to increase 0.8 percent, compared to a 1.3 percent rise in June. Mexico's central bank is expected to hold its key interest rate steady after the U.S. Federal Reserve maintained borrowing costs unchanged. Mexican policymakers are concerned that a deep slump in the peso to a record low this year could eventually hit inflation, which is currently at a record low. LIVECHAT - U.S. STRATEGY with Wells Fargo's Brian Jacobsen With the September meeting out of the way, investors can get down to the business of figuring out how long and deep this rate cycle will be. Brian Jacobsen, Wells Fargo Advantage Funds' Strategist, will be in the forum with insights on safe havens and higher yielding positions. (1000/1400) To join the discussion, click here: bit.ly/1kTxdKD (All references to a company's results expected to beat or miss analysts average estimates are according to Thomson Reuters StarMine, unless mentioned otherwise) (Compiled by Hardik Vyas in Bengaluru; Editing by Savio D'Souza)
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