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WEEK AHEAD
The Federal Reserve's policy meeting next week will be a big event for equity, currency and bond
markets. With traders widely expecting the Fed not to take any action next Wednesday, investors
will look for the central bank's view on the economy and to tease out its pace for raising
interest rates in a world of soft demand and low inflation. The Fed will likely downgrade its
"dot plot" from four rate hikes to the current market view of not more than two increases, which
should spur appetite for bonds and push two-year Treasury yields from their highest levels in
two months. If the Fed puts markets on notice for a rate hike in the months ahead, the dollar
would stand to benefit. Stocks have rallied back in the past month, with the S&P 500 closing in
on flat for the year, so indications of a faster-than-expected path of hikes could blunt the
rally.
A heavy economic data week, with February retail sales and inflation reports dominating the
calendar. These reports could shed more light on the health of the economy and the path of U.S.
monetary policy. The Commerce Department is expected to report on Tuesday that retail sales fell
0.1 percent, reversing January's 0.2 percent gain, according to a Reuters survey of economists.
The expected decline reflects cheaper gasoline, which has weighed on the value of receipts at
service stations, and a slight drop in automobile sales. But core retail sales, which exclude
gasoline, autos, building materials and food services, are expected to have increased 0.2
percent after rising 0.6 percent in January. Also on Tuesday, the Labor Department is expected
to report that producer prices dipped 0.2 percent in February after rising 0.1 percent in the
prior month. On Wednesday, a report from the Labor Department will likely show that the consumer
price index fell 0.2 percent in February on lower gasoline prices after being unchanged in
January. The core CPI, which excludes energy and food prices, likely rose 0.2 percent after
increasing 0.3 percent in January. The Commerce Department is expected to report that housing
starts rose to a 1.15 million-unit annualized rate in February from a 1.099 million-unit rate in
January. Also on Wednesday, the Federal Reserve is expected to report that industrial production
fell 0.3 percent in February after spiking 0.9 percent in January. Weekly jobless claims on
Thursday cover the survey period for March nonfarm payrolls. Claims fell to a five-month low in
the week ended March 5. Also on Thursday, the Labor Department will release its jobs openings
report for January. Other reports due on Thursday include the Philadelphia Federal Reserve
business conditions survey for March and the Commerce Department's current account report for
the fourth quarter.
Valeant Pharmaceuticals International Inc (NYSE:VRX), under scrutiny for its accounting and business
practices, releases fourth-quarter results on Tuesday after much delay related to the recent
recovery of health for CEO Mike Pearson (LON:PSON) and an internal committee's investigation of a specialty
pharmacy it previously used. The embattled drugmaker, which will also update its 2016 forecast,
added a representative from shareholder Pershing Square (NYSE:SQ) Capital Management to its board along
with two other new directors.
Oracle Corp (NYSE:ORCL) is expected to report third-quarter revenue slightly below estimates on Tuesday,
according to Thomson Reuters StarMine data, hurt by a strong dollar and a continued drop in
licensed software sales. Oracle, like other established technology companies, has been moving
its business to the cloud-based model, essentially providing services remotely via data centers
rather than selling installed software.
Adobe Systems (NASDAQ:ADBE) Inc is expected to report first-quarter revenue and profit above estimates on
Thursday, according to Thomson Reuters StarMine data, helped by a strong subscriber growth for
its Creative Cloud package of software tools. San Jose-based Adobe has largely finished
switching to web-based subscriptions from traditional licensed software to enjoy a more
predictable recurring revenue stream.
On Friday, Federal Reserve Bank of St. Louis President James Bullard speaks on the U.S. economy
and monetary policy before the Ninth Conference of the International Research Forum, in
Frankfurt, Germany. Meanwhile, Federal Reserve Bank of New York President William Dudley gives
welcome and opening remarks before the "Supervising Large, Complex Financial Institutions:
Defining Objectives and Measuring Effectiveness" conference. At the same conference, Eric
Rosengren, President of the Federal Reserve Bank of Boston discusses objectives and goals of
supervision.
Tiffany & Co (NYSE:TIF) is expected to report profit and revenue below analysts' estimates for the fourth
quarter on Friday, according to Thomson Reuters StarMine. A sustained decline in tourist
spending in the United States, the stronger dollar and a slowdown in China are expected to hurt
Tiffany's sales. Investors will look for forecast and commentary on luxury and tourist spending.
On Tuesday, plaintiffs suing General Motors Co (NYSE:GM) over a faulty ignition switch will ask the 2nd
U.S. Circuit Court of Appeals in Manhattan to reverse a pair of rulings last year that largely
upheld the automaker's protection from liability over conduct predating its 2009 bankruptcy.
TerraForm Power Inc, a yieldco of SunEdison, is expected to post a loss in the fourth quarter on
Tuesday, compared with breakeven results a year earlier, as demand falls. Investors will look
for comments on the company's forecast and an update on Vivint Solar terminating a deal to be
acquired by SunEdison.
Boeing (NYSE:BA) Co Commercial Airplanes Marketing Vice President Randy Tinseth is due to give market
update on Wednesday at the Bank of America Merrill Lynch (NYSE:BAC) Global Industrials & EU Autos
Conference in London.
BRP Inc, maker of Ski-Doo snowmobiles and Sea-Doo watercraft, is expected to post a fall in
fourth-quarter profit on Friday, as a warmer winter across North America hurt its snowmobile
business. Investors will look for comments on the company's outlook and update on its Russian
operations.
Canada is scheduled to release inflation and retail sales figures on Friday. Annual inflation is
expected to have cooled in February to 1.6 percent, pulling away from the Bank of Canada's 2
percent target and giving the central bank room to remain accommodative. Retail sales for
January will also be watched to see how the consumer was holding up at the start of the year.
Sales are forecast to have risen by 0.8 percent, offsetting some of December's disappointing
slump.
Brazil's statistics agency, IBGE, will issue its national unemployment rate on Tuesday. On
Friday, Mexico's central bank announces its key lending rate for March. The central bank had
unexpectedly raised its benchmark interest rate by 50 basis points to 3.75 percent in February.
Peru's gross domestic product (GDP) for January and Chile's fourth-quarter GDP are scheduled to
be released on Tuesday and on Friday, respectively. Chile's third-quarter GDP grew 0.4 percent
from the second on seasonally adjusted terms. On an annual basis, third-quarter growth was 2.2
percent.
ON MONDAY, MARCH 14
Viacom Inc hosts its shareholder meeting at Viacom International Studios. Shareholders are
expected to reject a proposal to extend voting rights and to approve the media company's
directors, despite recommendations from Institutional Shareholder Services to the contrary.
Jury selection is set to begin in the second trial involving a car accident blamed on a faulty
ignition switch that prompted General Motors Co to recall 2.6 million vehicles in 2014. The
first trial ended abruptly in January without a verdict when allegations surfaced that the
plaintiff in that suit gave misleading testimony. It could be the first chance for a jury to
actually weigh in on whether or not GM committed fraud by failing to inform the public about the
switch problems.
Amaya Inc, the operator of online gambling website PokerStars, is expected to post a
fourth-quarter profit, compared with a loss a year earlier. The company has said it will not
provide any forecast for 2016 as it evaluates a non-binding go-private offer from Chief
Executive David Baazov. Investors will look for updates on the proposal.
Brazil's central bank releases results of a weekly economic survey with more than 100 financial
institutions. This will include forecasts for GDP, interest rates and inflation rates.
LIVECHAT: SIGNS THE U.S. ECONOMY IS STALLING with TrimTabs Investment CEO David Santschi
U.S. Treasury income and employment taxes from the paychecks of 141 million U.S. workers are
slowing, a worrisome and reliable indicator that may signal U.S. recession, according to David's
TrimTabs Investment Research data and distinctive methodology. (1300/1700) To join the Global
Markets Forum, click here https://forms.thomsonreuters.com/communities/
LIVECHAT: KEEPING SCORE with Rick Horrow
The Professor of Sports, Rick Horrow - also host of the Reuters Keeping Score podcast -
discusses the business of sports with Forum members and marketing and brand executives of major
events from around the world. (1200/1600) To join the Global Markets Forum, click here
https://forms.thomsonreuters.com/communities/