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WEEK AHEAD
Markets lean into next week adjusting positions for the Federal Reserve, with the dollar
experiencing more weakness due to rising inflation indicators and a more dovish outlook from the
U.S. central bank. Stocks are expected to extend gains as credit conditions improve and overall
economic figures support markets. That may drive a bit of a rally in bonds too, given the
central bank's support for loose policy - but that can only go so far, given the expectation for
higher rates before long.
Next week, investors will mostly work through housing figures that include home price index on
Tuesday, revised building permit numbers on Thursday and new home sales data on Wednesday. New
U.S. single-family home sales are expected to have increased 3.1 percent to a seasonally
adjusted annual rate of 510,000 units in February from January, when sales dropped 9.2 percent
to a seasonally adjusted annual rate of 494,000 units. Separately, the orders for durable goods,
due to be released on Thursday, is likely to have dropped 2.8 percent in February from January.
Financial data firm Markit is expected to show a little gain in its preliminary Manufacturing
Purchasing Managers' Index on the same day. The index likely edged higher to 51.8 in March from
51.3 in February. When markets will be closed for Good Friday next week, the Commerce Department
will release its third estimate of gross domestic product for fourth quarter.
Nike Inc (NYSE:NKE), the world's largest sportswear maker, is expected to report third-quarter profit above
analysts' estimates on Tuesday, according to Thomson Reuters StarMine data. Nike has benefited
from strong demand for its basketball and running footwear, and has seen sustained growth in
sales of athletic apparel, as a trend of mixing and matching athletic clothing with casual wear
grows in the United States and Europe. Investors will look for comments on the performance of
its various footwear lines, trends influencing the direct-to-consumer channel and updates to the
forecast.
On Tuesday, Federal Reserve Bank of Chicago President Charles Evans, one of the Fed's most
dovish policymakers, will give his take on the appropriate path for monetary policy and the
risks to the U.S. economic outlook in his first public appearance after the Fed's March
policy-setting meeting. On the same day, Federal Reserve Bank of Philadelphia President Patrick
Harker speaks on "Growth and the Role of Economic Policies" before the Money Marketeers of New
York University. Harker also gives welcome remarks on Wednesday before the "Book Launch: Shared
Prosperity in America's Communities" event. On Thursday, Federal Reserve Bank of St. Louis
President James Bullard speaks on the U.S. economy and monetary policy before the New York
Association for Business Economics, in New York.
Accenture Plc is expected to report second-quarter earnings above analysts' estimates on
Thursday, according to Thomson Reuters StarMine data. The provider of consulting and outsourcing
services has been benefiting from strong demand in its consulting business, particularly in
North America. The company has been investing heavily to boost its digital business, which
offers analytics, content management, social media and cloud services.
Cheerios cereal maker General Mills (NYSE:GIS) Inc's third-quarter sales are likely to come in below the
average analyst estimate, according to Thomson Reuters StarMine data. The company has been
cutting jobs, selling plants and selling brands to reduce expenses. It is also investing in
gluten-free foods and cutting back on sodium in its products to cater to changing consumer
preferences.
GameStop Corp (NYSE:GME) is expected to report fourth-quarter revenue below average analyst estimate,
according to Thomson Reuters StarMine data. The world's largest retailer of video games cut top
end of its fourth-quarter earnings per share and same-store sales forecast.
Linux operating system distributor Red Hat Inc (NYSE:RHT) is expected to report fourth-quarter revenue
above average analyst estimate on Tuesday, according to Thomson Reuters StarMine data. The
company, which raised its full-year revenue forecast in December, has benefited from higher
demand from businesses for its software used in data centers and cloud computing. Investors will
be looking for first-quarter forecast.
Winnebago Industries Inc, the biggest U.S. motorhomes maker, is expected to report a rise in
second-quarter profit on Thursday, helped by higher sales of its cheaper models. Investors keep
a close watch on the company's quarterly performance for clues on consumer spending on
big-ticket discretionary items. Investors will look for an update on 2016 forecast and comments
on demand trends for the rest of the year.
The main event in Canada next week will be the release of the federal government's budget on
Tuesday. Finance Minister Bill Morneau will present his first budget and he is set to unveil a
deficit of up to C$30 billion ($23.08 billion) - three times the amount the ruling Liberal party
promised to run - in the 2016/17 fiscal year. Prime Minister Justin Trudeau says Ottawa needs to
invest heavily in infrastructure now to help boost a sluggish economy. Opposition parties say he
risks returning Canada to an era of persistent massive deficits.
Canadian gold miner Eldorado Gold Corp is expected to report a fall in fourth-quarter profit on
Wednesday, hurt by a slump in gold prices. The focus this quarter will be on the miner's plans
for its Greek assets, as it has been in dispute with the Greek government over plans to develop
gold mines in northern Greece. The company, which has halted construction of its Skouries
project, is awaiting decision from the Greek government over permits for its Olympias project.
Mexican inflation data for early March, due on Wednesday, will confirm if there is still little
impact on consumer prices from a weak peso. Retail sales data for January will also be released
on Wednesday. Meanwhile, the unemployment rate in Brazil's main cities will be released on
Wednesday, while the national jobless rate, a new indicator created by IBGE to replace its
current benchmark for unemployment, which is based on a smaller sample of six major urban areas
is expected to be released on Thursday.
MONDAY, MARCH 21
Apple Inc (NASDAQ:AAPL) is expected to unveil a smaller iPhone, an updated iPad and new bands for Apple Watch
at an event at its headquarters in Cupertino, California. Some analysts expect the company to
use the event to unveil a 4-inch (10-cm) screen phone, reintroducing the smaller size after
enlarging screens with the iPhone 6 and 6 Plus in 2014.
Federal Reserve Bank of Atlanta President Dennis Lockhart speaks on the economic outlook and
monetary policy before the Rotary Club of Savannah. After the Fed's policy meeting this week,
Lockhart will be among the first policymakers to elaborate on the central bank's latest
statement. No rate hike is expected. But the statement will set the tone for rate hikes to come,
and give some sense of when rates will next rise. Important to that evaluation is how members
like Lockhart see the path of inflation, now that prices have given some sense of increase and
expectations have also risen. (1240/1640) Separately, Federal Reserve Bank of Richmond President
Jeffrey Lacker speaks on "The Outlook for Inflation and Inflation Expectations" before the
Global Interdependence Center Conference: "Inflation Expectations, Implications & Policy
Response in a New Paradigm for Commodities" in Paris, France. (0415 /0815)
U.S. home resales are expected to have dropped in February from January. Existing home sales as
measured by the National Association of Realtors are expected to have fallen 2.2 percent in
February to an annual rate of 5.34 million units. (1000/1400)
Brazil's state-controlled oil company Petroleo Brasileiro SA, or Petrobras, releases its
fourth-quarter and full-year 2015 results. Petrobras will hold conference calls with investors
and journalists in Portuguese and English on the next day to discuss its results.
Business research provider IHS Inc is expected to report first-quarter earnings below analysts'
estimates, according to Thomson Reuters StarMine. Investors will focus on how long the company
expects demand from its energy clients to remain low and if its growing transportation business
can offset the impact.
The U.S. Federal Trade Commission will go to court seeking a preliminary injunction to stop
Staples Inc (NASDAQ:SPLS) from merging with Office Depot Inc on grounds that the deal between the rivals is
illegal under antitrust law.
U.S. President Barack Obama will meet Cuban President Raul Castro in Cuba, a historic trip that
will be another major step toward ending decades of animosity between the former Cold War foes.
In the first visit by a U.S. president to the Caribbean nation since 1928, Obama will also meet
American business leaders, Cuban Americans and entrepreneurs.
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