What to Watch in The Day Ahead; Tuesday, Aug. 19

Mon Aug 18, 2014 3:12pm EDT

(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)

U.S. consumer prices likely rose slightly in July, possibly driven by a rise in gasoline and food prices. The Labor Department is expected to report that its consumer price index inched up 0.1 percent from June. Real average weekly earnings likely went up last month. (0830/1230) Separately, the Commerce Department is expected to report that housing starts increased to a 969,000-unit pace in July from 893,000 units, while building permits rose to a 1,000,000-unit rate from 973,000 units in June. (0830/1230) Home Depot, the world's largest home improvement chain, is likely to report a second-quarter profit above analysts' expectations, according to StarMine. The company said in May that it expected to realize in the second quarter most of the sales it lost in the first quarter due to a severe winter in the United States. Other smaller home improvement retailers such as Container Store and Bed Bath & Beyond as well as retail giant Wal-Mart said weak consumer spending hurt results, with the latter two resorting to deep discounting to attract customers. However, July sales data indicate sales of building material, garden equipment and supplies grew as more people undertook home renovation projects delayed due to the long winter, which is expected to have benefited Home Depot and rival Lowe's. Investors will look out for comments about the second half of the year, when analysts expect a slowdown in housing to hit demand for home improvement products. Top global miner BHP Billiton is expected to report a rise in second-half underlying earnings. There is also a chance BHP will announce a spin-off of its manganese, aluminium, South African coal and Cannington silver assets and/or announce the closure or sale of its Nickel West business. Medtronic is scheduled to post its fiscal first-quarter results, but investors will be more interested in CEO Omar Ishrak's insights on how the company's planned acquisition of fellow medical device maker Covidien will shape its outlook. Investors will also be keen to know his thoughts on efforts by the White House to curb tax inversion deals. TJX Cos, the owner of off-price chains TJ Maxx and Marshalls, will report second-quarter results before the bell. The retailer has missed profit estimates in the last two quarters. A pullback in consumer spending on discretionary items such as apparels forced TJX to lower its full-year earnings forecast last quarter. Investors will look for signs of revival in apparel sales. U.S. cosmetics company Elizabeth Arden is expected to report fourth-quarter results. The maker of Red Door perfume and skin care brands such as Ceramide and Prevage was in the spotlight after South Korea's LG Household & Healthcare Ltd said it made an offer to takeover the company, but subsequently walked away from the deal after Arden said it would embark on an extensive restructuring process due to mounting losses amid falling perfume sales. The company is trying to exit some low-margin celebrity fragrance businesses such as Justin Bieber and Usher to stem the losses and investors will be keen on hearing the progress of such initiatives and whether more cost cuts are planned. According to StarMine, the company is expected to beat on both profit and sales. The Transportation Safety Board of Canada is scheduled to release its final report into last year's fatal Lac-Megantic disaster, when a runaway train carrying crude jumped the rails and blew up in a small Quebec town, killing 47 people. The TSB is likely to focus on the braking system of the train and the fact the train had only one engineer on duty at the time of the disaster. Separately, Transport Minister Lisa Raitt will react to a Transportation Safety Board of Canada report. She may outline what the government plans to do to address the TSB's recommendations. Canadian Finance Minister Joe Oliver is scheduled to speak to reporters after attending a business roundtable at the London Small Business Centre. The national statistics institute of Argentina is scheduled to release unemployment figures for the second quarter. (1500/1900) (All analysts' estimates are according to Thomson Reuters I/B/E/S/) (Clarification - Trina Solar Ltd is expected to report its second-quarter results on Aug. 26. The "What to Watch in the Week Ahead and on Monday, Aug. 18" edition on Friday erroneously said the company was scheduled to report on Aug. 19) (Compiled by Sourav Bose in Bangalore; Edited by Maju Samuel)

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