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What to Watch in The Day Ahead; Tuesday, July 15
July 14, 2014 / 6:35 PM / 3 years ago

What to Watch in The Day Ahead; Tuesday, July 15

(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) JPMorgan Chase & Co is scheduled to report second-quarter results. Amid questions about the prospects for the slumping mortgage lending and bond-trading businesses, analysts expect the company will report a 14 percent drop in net income for the quarter. Goldman Sachs Group Inc is scheduled to report results for the second quarter, expected to be another bad one for trading businesses. Executives at other banks have indicated that trading revenue will be down about 20 percent. Revenue from Goldman’s key trading business of fixed income, currency and commodities has been declining nearly every quarter for the past four and a half years, keeping open the question of whether these changes are temporary or of a more permanent nature. Weak results also raise the question of whether Goldman will have to do more to cut costs and staff levels. Johnson & Johnson is expected to report higher second-quarter earnings, fueled by sales of newer prescription drugs and rebounding sales of over-the-counter medicines that had been recalled in recent years due to quality issues. Federal Reserve Chair Janet Yellen testifies on the central bank’s semiannual monetary policy before the Senate Banking Committee. Yellen can be expected to hew closely to the Fed’s last policy statement. Investors will parse her comments closely for any signs that data released since the Fed’s last meeting has shifted the central bank’s thinking at all. (1000/1400) Intel posts second-quarter results, following signs of PC stabilization. In June, the world’s largest chipmaker increased its revenue outlook on the back of signs of improved demand for laptops. But it remains to be seen whether the PC industry is set for expansion following years of decline due to consumers’ preferences for tablets. Yahoo Inc is scheduled to report second-quarter results. Wall Street may not find much of interest in company’s quarterly report. That’s because soon-to-IPO Chinese e-commerce giant Alibaba, in which Yahoo owns a roughly 20 percent stake, has already reported its most recent financial results independently. As a result, investors have already seen the only numbers in Yahoo’s report that they really care about. Revenue from Yahoo’s core business is expected to remain stagnant, as CEO Marissa Mayer marks two years at the helm of the struggling Internet company. While any updates on a potential rebound in Yahoo’s struggling advertising business will be welcome by Wall Street, investors will be primarily interested in any update on Yahoo’s plans for the cash windfall it receives after Alibaba’s IPO. International Council of Shopping Centers is scheduled to release weekly chain store sales. (0745/1145) Labor department is also expected to show an increase of 0.3 percent and 0.2 percent in import and export prices for June, respectively. (0830/1230) Retail sales data is expected to add to signs that the economy is continuing to improve. The sales likely rose 0.6 percent in June. (0830/1230) Additionally, the commerce department is likely to show an increase of 0.6 percent in business inventories for May. (1000/1400) CSX Corp is likely to post second-quarter results. Demand for thermal coal is expected to recover in the United States after two years of decline as power producers switch back to coal due to a recent run-up in natural gas prices. That should bode well for railroad operator CSX which depends on shipments of coal products for about a quarter of its revenue. Investors will be looking for comments on coal volumes and outlook for the rest of the year. Omnicom, the No.1 U.S. advertising company is scheduled to report quarterly results. Company’s second-quarter profit and revenue is likely to beat analysts’ estimates, according to StarMine data. Omnicom, whose $35 billion merger with France’s Publicis failed to materialize in May, is expected to benefit from higher ad spending in the United States. Chile’s central bank holds its monthly meeting to set the benchmark interest rate. After cutting 100 basis points between October and March, it has since left the rate at 4.0 percent, as worries about high inflation offset its wish to stimulate the economy. However, it has said the easing cycle is not yet over, and expects inflation to cool over the year. (1800/2200) Peru’s official growth figures on May are scheduled to release. Peru’s economy slowed to grow 4 percent in the first four months of 2014 from the same period a year ago. The finance minister has said that May’s expansion will likely be bigger than April’s 2 percent year-on-year rise, which was the slowest monthly pace in nearly five years. (1000/1400) Separately, Argentina is scheduled to release June consumer inflation data. (1500/1900) (Compiled by Sourav Bose in Bangalore; Edited by Don Sebastian)

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