What to Watch in The Day Ahead; Thursday, May 8
(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) Federal Reserve Chair Janet Yellen will testify on the economic outlook before the Senate Budget Committee. She is expected to repeat the prepared testimony she delivered to the Joint Economic Committee, but investors will look for anything in the Q&A that takes the story forward. (0930/1330) Separately, Federal Reserve Bank of Philadelphia President Charles Plosser speaks on monetary policy before the Council on Foreign Relations. (0800/1200). The Labor Department is expected to release jobless claims data for the week. Initial claims for state unemployment benefits likely fell last week after a surprise spike upwards a week earlier that economists suggested was due to trouble seasonally adjusting the data around the Easter and Passover holidays. The decrease to an expected 325,000 would bring them back into line with their recent trend and suggest the labor market's recovery is on track.(0830/1230) Euro zone monetary policy is likely to remain steady when the Governing Council of the European Central Bank meets, but markets will be trying to gauge how close the bank is to action. Oil and gas company Apache Corp, which has a large presence in the Permian Basin in Texas, is scheduled to report first-quarter earnings.
Argentina's state-owned oil company YPF is expected to report results for the first quarter. The company's figures are closely followed by markets because it is leading the investment efforts to develop the Vaca Muerta's shale oil and gas formation.
Acquisitive Canadian drug company Valeant Pharmaceuticals is scheduled to report first-quarter results. The focus will be on the company's hostile $47 billion bid, with help from activist investor Bill Ackman, for rival Allergan. Online travel agency Priceline.com is expected to report a higher first-quarter profit as its top brand, Booking.com, grew in the United States. The company faces more competition in the online space, but it has growth opportunities because of its sizable presence in emerging markets.
Satellite TV provider Dish Network is expected to report first-quarter results slightly above analysts' estimates, according to StarMine data. Charlie Ergen, Dish's billionaire chairman, may give his views on the M&A landscape on a conference call. Dish's rival DirecTV has reportedly been approached by AT&T for a takeover, but analysts say Dish is actually AT&T's preferred target.
Eyes will be on Germany and the United States as Deutsche Telekom is scheduled to report first-quarter results. The company has said in March that it would spend more money attracting customers to its T-Mobile business in the United States, suggesting it aims to go it alone in that market for now even though there is talk of a sale of the company.
Japan's Toyota, the world's biggest automaker by sales volume, is scheduled to announce full-year earnings. The company is expected to post record profits for the year ended March, buoyed by a weaker yen that made its export business more profitable and strong sales in Japan ahead of the sales tax hike in April. CBS, which will likely lose its top-rated status among the 18-49 year old viewers that advertisers want, is expected to still report strong first-quarter results. The earnings will be driven by deals it has made this year for digital showing of its TV shows with Amazon and Hulu Plus, as the company continues to build its non-advertising related revenues. Canadian auto parts maker Magna International is expected to report higher earnings per share and revenue during the first quarter, helped by continued strength in the North American market and improvements in European and developing markets. Regeneron Pharmaceuticals, whose eye drug has become one of the fastest growing medicines in the history of biotechnology, is scheduled to report first-quarter results. Investors will be looking for any change in Regeneron's 2014 sales forecast for Eylea, as the company has said it expects the drug to be approved for new uses. The company said in February that it expected Eylea sales of $1.7 billion to $1.8 billion in the United States.
News Corp is expected to report third-quarter results and the focus will be on its large trove of cash - it just made its largest acquisition in the book publishing division - and any update regarding a permanent CEO for one of its key divisions, Dow Jones. Anti-virus software maker Symantec is likely to report fourth-quarter results in line with analysts' estimates. Recently, the company sacked its CEO for the second time in less than two years as it struggles to revive growth amid eroding PC sales. Symantec has been losing market share to rivals such as FireEye and Palo Alto Networks. Investors will look out for management commentary on the appointment of a new CEO and the outlook for the year.
CEO Greg Maffei may shed light about the Charter-Comcast spin-off and divestitures that were announced last week when Liberty Media announces its first-quarter results. Liberty owns 27 percent of Charter and its Chairman John Malone was seen as instrumental in the recent deal with Comcast. Nuance Communications, best known for making the software that powers the Siri feature on Apple's iPhones, is expected to report a drop in profit in the second quarter due to certain deferred deals with phone makers as the company tried to hold on to its higher pricing. However, Nuance is in the process of replacing the expired contracts, which will help boost profit from the next quarter. Nuance's tie-up with Intel last year to supply its dictation applications for Lenovo, Asus, Acer and Toshiba notebooks is expected to boost results this quarter. Nvidia is expected to give its revenue forecast for the July quarter as investors worry about the chipmaker's slow progress expanding into smartphones and tablets. On Tuesday, the company posted its results for the April quarter early after a preliminary draft was accidentally emailed to about 100 internal individuals. AMC Networks is likely to report a fall in first-quarter profit as it spends more on programming to replace marquee shows such as "Breaking Bad". The cable TV network will air the final season of its long-running hit "Mad Men" from April to June. Investors are hoping that AMC's two new shows "Turn" and "Halt & Catch Fire", which are expected to debut in 2014, turn out to be hits as big as "Breaking Bad" and "Mad Men". New York area-cable provider Cablevision is scheduled to report first-quarter results and investors will watch whether the signs of a turnaround it showed last quarter are sticking. Credit investment and private equity firm Apollo Global Management is scheduled to report first-quarter financial results with investors focused on the outlook for asset sales and the impact of a potential rise in interest rates. Chile's central bank is expected to release April's inflation rate. Investors will watch for whether a recent uptick in price pressures continues, and how that could potentially affect the bank's rate-setting strategy. Also, Peru's central bank is expected to announce whether it will hold the benchmark interest rate at 4 percent as it has for the past five months. Separately, data from Mexico is expected to show whether inflation continued to cool in April below the central bank's 4 percent ceiling, from the 3.76 percent pace notched in March. Cheetah Mobile, the Chinese security and optimization software maker for mobile phones and PCs, will become the latest in a slew of Chinese companies to go public in the United States. Cheetah is being spun out of Kingsoft Corp, a unit of Hong Kong-listed entertainment and office software maker. Cheetah is looking to raise up to $174 million by offering 12 million American depositary shares at $12.30-$14.50 each. The recent selloff in Chinese tech stocks and waning appetite for companies in a crowded IPO market are likely to pressure the company's pricing on Wednesday. Kingsoft owns more than 50 percent of Cheetah's shares, while Tencent Holdings is the second largest shareholder with an 18 percent stake.
(Compiled by Ayesha Sruti Ahmed in Bangalore)