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Google is expected to release second-quarter results after the bell. The company has unveiled a
string of new initiatives to push its Android mobile software into more areas of everyday life,
from televisions to smartwatches. Wall Street will be keen to hear the Internet company's view
on the time frame for these new initiatives to contribute to Google's revenue, which continues
to be primarily driven by its dominant search advertising business, as well as the spending
involved. But the primary focus for investors will be on Google's decreasing advertising rates,
which have been under pressure as consumers increasingly access Google's online services from
Morgan Stanley is scheduled to report earnings for the second quarter. The period was another
tough one for trading, with low market volatility resulting in sluggish client trading. For
Morgan Stanley, which is reducing exposure to bond trading as it builds more stable businesses
like wealth and investment management, the weak trading quarter may not affect it as much as
some rivals, like Goldman Sachs, Citigroup and JPMorgan Chase.
International Business Machines is likely to post second-quarter earnings after the bell.
Analysts expect a flat performance in IBM's software sector, which was down four percent last
year as the company struggles to implement grand visions for its middleware products. Analysts
also expect a one percent decline in services, and more commentary on the company's slumping
hardware sales, which last quarter brought the company its worst revenue in five years.
Investors will also look to see if a recent announcement of a $3 billion investment in chip R&D
will influence CFO's projections of a stable hardware sector in 2014 and growth in 2015.
General Motors CEO Mary Barra testifies to the U.S. Senate Commerce Committee on the automaker's
ignition-switch problems which have been linked to 13 fatalities. Senate panel continues its
probe into why it took GM more than a decade to recall cars with faulty ignition switches linked
to fatal accidents.
UnitedHealth Group, the largest U.S. health insurer is scheduled to report second-quarter
earnings before the bell. Market will look for signs if the company could control its medical
cost ratio, which reflects the percentage of premiums paid out in claims to cover customer
procedures and doctor visits. Analysts expect UNH to earn $1.26 per share on revenue of $31.98
billion. Market will be keen to see if the insurer continues to back its previous view of 2014
earnings of $5.40 to $5.60 per share.
Drugmaker Novartis is expected to report second-quarter results following its April announcement
of a portfolio revamp. The focus will be on any changes to its outlook now that competitor
Ranbaxy has finally been given the green light by U.S. health regulators to produce a cheaper,
copycat version of its once best-seller Diovan.
Oilfield services providers Schlumberger and Baker Hughes are both expected to report a rise in
second-quarter profit, helped by increased drilling activity in the United States. The companies
have been competing for a smaller number of new contracts in North American shale fields as
natural gas prices remained weak for several years, putting a damper on drilling. But activity
has slowly picked up this year with companies spending more to drill and complete wells as
prices improve after an unusually harsh winter in North America left stockpiles depleted. The
companies have also warned of weakness in Brazil and Russia. Investors will look for details on
the impact of sanctions in Russia and the political turmoil in Iraq.
U.S. housing starts likely rebounded last month after falling 6.5 percent in May. The Commerce
Department is expected to report that the groundbreaking for homes increased to a 1.018
million-unit rate in June from 1.001 million units in May. (0830/1230) Initial unemployment
insurance claims for the week ended July 12th are likely to have rebounded back to 310,000, up
from 304,000 in the week ended July 5th. Continuing claims should hover around 2.575 million for
the week ended July 5th. (0830/1230) Separately, Philadelphia Federal Reserve Bank releases a
survey on business activity, which is expected to have slipped to 16.0 for the month of July.
Federal Reserve Bank of St. Louis President James Bullard is scheduled to speak on the U.S.
economy and monetary policy before the Owensboro in 2065 conference. (1335/1735)
SAP is expected to report second-quarter results. Focus will be on whether the German business
software company has succeeded in implementing cost cutting and how it is faring in its
transition to offering internet-based, or cloud-based, software, away from its traditional
Capital One Financial is expected to report second-quarter earnings after the bell, as analysts
say credit quality has been trending better than expected for card issuers, while loan growth
has been solid. The company had said that by the end of the quarter, it would mostly be done
with the impact of the 2012 takeover of HSBC's U.S. credit card division on its monthly domestic
card charge-off rate. The company said the current low charge-off levels are not necessarily
sustainable, but expects the strong credit performance of its commercial banking business to
Baxter International is likely to release second-quarter results before the bell. Wall Street
expects the drug and medical device maker to hit the top end of its own adjusted earnings
expectations, based mainly on recent acquisitions. Investors will also be looking for more on
the impending spin off of its biotechnology operations to focus on its core medical technology
business in 2015.
Orthopedics products maker Stryker Corp is expected to report higher second-quarter profit on
increased sales, rebounding from a drop in profit in the first quarter. But investors will be
more focused on anything management has to say about its acquisition strategy after Stryker felt
compelled to deny rumors that it was attempting to buy Smith & Nephew.
Credit card processor Alliance Data Systems is expected to report a second-quarter profit on
Thursday, helped by higher revenue at its private label services and credit unit, amid a rebound
in consumer spending. Alliance Data, which competes with GE Capital, Citi Retail Services and
Capital One, operates loyalty programs and private-label credit cards. The company's proprietary
data aggregation unit Epsilon, which has partnership with Twitter, Facebook and Adobe, is facing
competition from other market services firms.
Mattel, the world's largest toymaker, is expected to report second-quarter results before the
bell. Sales of its iconic Barbie dolls have fallen in seven of the last nine quarters as
children opt for building blocks such as the ones offered by Denmark's Lego and other electronic
games. Smaller rival Hasbro, however, has been performing better due to strong demand of its
toys such as My Little Pony.
Private equity firm Blackstone Group is scheduled to report second-quarter earnings with
investors focused on the appreciation of its portfolio amid strong equity markets.
AutoNation, the biggest U.S. auto dealer group and usually the first of the groups to report
earnings, is scheduled to release second-quarter results before the bell.
Athenahealth, the healthcare technology company is scheduled to report second-quarter results
after the bell and Cepheid, the biotechnology company is also expected to report second-quarter
results after the bell.
Canada's second-largest rail operator, Canadian Pacific Railway, is expected to report strong
second-quarter revenue growth as freight volumes continue to improve. CEO Hunter Harrison's
initiatives to cut costs has raised margins over the last several quarters, but analysts expect
softer margins for the second quarter as operating costs increase. Canadian Pacific and its
bigger rival Canadian National have come under a lot of pressure to clear a big crop backlog,
which resulted from a record harvest last year and subsequent disruptions of service caused by
an unusually harsh winter.
(Compiled by Sourav Bose in Bangalore; Editing by Savio D'Souza)