What to Watch in the Week Ahead and on Monday, February 5

Cummins

02/02/2024 19:42

(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
 DAY/US . Thomson One users can register at RT/DAY/US. All times in ET/GMT)
    
ON MONDAY:
        
  
McDonald's reports its fourth-quarter results and is expected to report a rise in quarterly
same-store sales, as its affordable burgers and fries attract customers even as they spend
cautiously. Analysts will be focused on the company's outlook for 2024, its comments on traffic
trends, margin expectations and plans for promotions.
    
Caterpillar is expected to report a rise in fourth-quarter profit on the back of strong demand
for large construction equipment. Investors will look for comments on inventory levels and the
impact of high borrowing costs on the company's order books.
    
On the U.S. economic front, ISM non-manufacturing PMI is likely to show a reading of 52.0 in
January after a print of 50.6 in December. Additionally, S&P Global's final reading for
composite PMI is scheduled for release.
    
Federal Reserve Bank of Atlanta President Raphael Bostic is scheduled to give welcome remarks
before the virtual "Uneven Outcomes in the Labor Market" conference hosted by the Federal
Reserve Board of Governors and the Federal Reserve Banks of Atlanta, Boston, Cleveland,
Philadelphia, San Francisco, and St. Louis. (1400/1900)
    
Tyson Foods, in its first-quarter results, is expected to report lower earnings per share and
net income compared to a year ago and flat revenue, Eikon estimates show. Tight cattle supplies
have raised costs for U.S. beef processors, but producers still sent more of the animals than
expected to feedlots last fall in a potential boost to Tyson. The meat company has closed
several U.S. chicken plants in a bid to improve results, and investors will watch to see whether
the cutbacks are paying off. Tyson recently opened new U.S. facilities to produce chicken
nuggets and bacon and could face start-up costs in its prepared foods division.

Estee Lauder is expected to post a decline in second-quarter revenue, hurt by slowing sales from
Asia Travel retail and continued pressure from retailers cutting back inventory in the region.
Investors will look out for comments on China's recovery, demand in the United States, and any
disruption to business due to the conflict in the Middle East. 

Commercial REIT Simon Property Group is expected to post a rise in fourth-quarter revenue on
strong leasing demand for its mall spaces. Investors will look for occupancy trends for the full
year and any forecast the company may provide.

FMC Corp is expected to report a fall in fourth-quarter profit, hurt by lower sales volumes in
Latin America, mainly due to destocking in Brazil and drought in Argentina.

Chipmaker ON Semiconductor is expected to report a drop in fourth-quarter revenue on Monday,
hurt by sluggish demand for its silicon carbide chips as Electric vehicle growth slows.

For Canada, the country's leading index for January is set for release.

On the Latin American front, S&P Global's services and composite Purchasing Managers Index (PMI)
numbers for Brazil are due. Meanwhile, according to central bank data, the country is expected
to post a current account deficit of $7.428 billion for December, compared to a 1.600 billion
deficit in November. Meanwhile, Foreign direct investment for the month probably reached $5.850
billion.
    
REST OF THE WEEK:
Walt Disney is expected to report first-quarter results on Wednesday. Analysts expect Disney's
revenue to grow by 0.7% in the December quarter, however, Wall Street expects ad revenue to drop
63% and revenue from linear networks to fall by 59%.
 
PepsiCo is expected to post a rise in fourth-quarter revenue on Friday, helped by resilient
demand for its sodas and snacks at a time when customers have largely cut back on pricier items.
Investors will look out for volume growth, comments on pricing actions and any disruption to
business due to the conflict in the Middle East.
    
On the U.S. economic calendar, the Labor Department's jobless claims data is coming out on
Thursday. Initial claims for state unemployment benefits probably dropped 4,000 to a seasonally
adjusted 220,000 for the week ending Feb. 3. Number of people receiving benefits after an
initial week of aid, also known as continued claims, for the week ending Jan. 27 is also due. On
Wednesday, the Commerce Department is scheduled to report that international trade likely
contracted to a deficit of $62.2 billion in December from a deficit of $63.2 billion in
November. Separately, the Commerce Department will likely report the wholesale inventories data
for December on Thursday.
    
On Wednesday, Federal Reserve Bank of Richmond President Thomas Barkin is scheduled to
participate in a conversation before the Economic Club of Washington, D.C. The next day, Barkin
will speak before the Economic Club of New York. Federal Reserve Bank of Minneapolis President
Neel Kashkari will likely participate in a question-and-answer session during Tuesday's Greater
Mankato Growth luncheon. Separately, Federal Reserve Bank of Cleveland President Loretta Mester
is expected to speak on the economic outlook before the Ohio Bankers League Economic Summit on
the same day. Also on Tuesday, Federal Reserve Bank of Philadelphia President Patrick Harker is
expected to speak on "The Federal Reserve's Role in Our Economy" before a Rowan Institute for
Public Policy & Citizenship event. On Wednesday, Federal Reserve Board Governor Adriana Kugler
is likely to speak on "The Outlook for the Economy and Monetary Policy" before the Brookings
Institution.
    
On Tuesday, Federal Reserve Bank of Boston President Susan Collins is expected to give opening
and overview remarks before the "Uneven Outcomes in the Labor Market" virtual conference hosted
by the Federal Reserve Board of Governors and the Federal Reserve Banks of Atlanta, Boston,
Cleveland, Philadelphia, San Francisco, and St. Louis. At the same event on Wednesday, Federal
Reserve Board Governor Michelle Bowman is likely to speak via pre-recorded video on "Supporting
Entrepreneurship and Small Businesses". Meanwhile, Collins is expected to offer economic
perspectives before the Boston Economic Club on the same day.

Eli Lilly is scheduled to report fourth-quarter results on Tuesday before markets open.
Investors will closely watch the performance of its weight-loss drug Zepbound, which recently
received regulatory approvals in Europe, the U.K., and the U.S. Focus will be on the drugmaker's
2024 sales and profit forecast, as well as the company's plans to ramp up supply for its
top-selling diabetes drug Mounjaro and Zepbound. 

Philip Morris International is expected to post a rise in fourth-quarter revenue on Thursday,
helped by higher pricing of its combustible cigarettes and steady demand for its heated tobacco
products. Investors will look out for comments on demand trends and any forecast the company
provides.

S&P Global is expected to report a jump in fourth-quarter profit on Thursday, helped by strong
demand for data and analytics. Separately, PayPal is expected to report a rise in adjusted
profit on Wednesday, with analysts and investors closely watching for updates on the payments
firm's plans to expand its margins and reignite growth in non-transaction-related segments. The
payments company is also expected to provide its outlook for 2024 profit and revenue growth with
all eyes on spending trends in an uncertain economy. On the same day, Business payments firm
Fleetcor Technologies is expected to post a rise in fourth-quarter profit, helped by strong
performance in its fleet segment. On Tuesday, Jack Henry & Associates is expected to report a
drop in second quarter profit on Tuesday hurt by an increase in its operating expense.

NYSE-parent Intercontinental Exchange is expected to report a rise in fourth-quarter profit on
Thursday, helped by stronger trading volumes. Analysts and investors will watch closely for
updates on mortgage business growth and recovery in initial public offerings.

CVS Health will report fourth-quarter results before markets open on Wednesday. The focus will
be on the company's forecast for 2024 and comments on medical costs and its new pharmacy pricing
model.

Spirit Airlines is expected to report its fourth quarter results on Thursday. Investors will be
watching for the company's plans to refinance its debt and any comments on its blocked merger
with JetBlue Airways.
    
U.S. truck engine maker Cummins is expected to report higher fourth-quarter results on Tuesday
as demand for engines holds strong. The growing interest in clean energy models is also
anticipated to boost Cummins' margins as it increasingly invests in fuel cell and hydrogen
production technology. Investors would be interested to know the company's annual guidance and
how it will accommodate a slow recovery in the Chinese market.
    
Centene will report fourth-quarter results on Tuesday before markets open. Investors will look
for comments regarding the insurer's medical costs and performance at its Medicaid insurance
business, as well as any updates to its F.Y. 2024 earnings outlook.

Coty is expected to post a rise in second-quarter revenue on Wednesday, riding on robust demand
for beauty products across price brackets. Investors will watch out for comments on pricing
actions and product launches from the CoverGirl parent. Meanwhile, Mattel is expected to post a
rise in fourth-quarter revenue, as the company rides on a boost to sales from the popularity of
the Barbie movie during the crucial holiday season. Investors will watch out for comments on its
American Girl and Fisher-Price segments and demand trends in the broader toy industry. 

Aerospace supplier Spirit AeroSystems, on Tuesday, is likely to release its fourth-quarter
results on the heels of a mid-air cabin panel blowout that resulted in the grounding of the
Boeing 737 MAX 9 fleet. On the same day, the new head of the Federal Aviation Administration is
expected to appear before Congress as the agency faces questions on its oversight of planemaker
Boeing following the emergency landing on Jan. 5 of a 737 MAX 9. 

Pringles maker Kellanova, on Thursday, is expected to report a fall in fourth-quarter revenue
hurt by weakening demand for its Cheez-It crackers and Rice Krispies, which took a hit from
higher prices. Investors will look out for volume growth, comments on pricing and input costs.

Shares of Warburg Pincus-backed Fortegra Group are set to debut on the New York Stock Exchange
on Friday. Prospective IPO candidates will watch the debut closely to gauge investor appetite
for insurance companies.

On Tuesday, insurer Prudential Financial is expected to post a rise in fourth-quarter profit on
higher net premiums and net investment income. Meanwhile, Willis Towers Watson is expected to
report a jump in fourth-quarter profit on the same day, helped by robust demand for its broking
and consulting services. The following day, Globe Life is expected to post a rise in
fourth-quarter profit on higher insurance underwriting and investment income.
    
Global crop trader and processor Bunge is expected to report a fall in fourth-quarter revenue on
Wednesday, as improvement in supply had lowered crop prices in the quarter. Investors and
analysts will look out for comments on demand and crush margins.
    
Fox Corp is expected to report a drop in second-quarter revenue on Wednesday as advertisers cut
spending on its television networks due to an uncertain economy.
    
The New York Times is expected to post a rise in fourth-quarter revenue on Wednesday. Investors
will look for updates on the company's ad sales and digital subscriber growth as the publisher
aims to achieve 15 million subscribers by the end of 2027.
    
Home-building products maker Masco is expected to post a decline in fourth-quarter revenue on
Thursday, owing to weaker demand for plumbing and architectural products, including paints.
Investors will look for comments on demand, pricing action, sales and profit forecast.

On Thursday, Regency Centers is expected to post a rise in fourth-quarter revenue as the
commercial REIT benefits from strong leasing demand at its grocery-anchored shopping centers.

VF Corp is expected to post a fall in third-quarter revenue on Tuesday as it struggles to
rekindle demand for its iconic brands, such as Vans and The North Face. Investors will look for
comments on sales during the crucial holiday season and any cost reduction strategies.
    
Baxter International is expected to report its fourth-quarter results on Thursday. Investors
will focus on the company's 2024 forecast and the sales of its dialysis products and infusion
pumps.

Statistics Canada on Friday is likely to indicate that the country's economy added 15,000 net
jobs in January, compared to just 100 jobs in the previous month. The unemployment rate likely
increased to 5.9% in January, from 5.8% in the previous month. Ivey Purchasing Managers Index
(PMI) data is scheduled for release on Tuesday. Meanwhile on Wednesday, the country's trade
balance data for December month is scheduled for release. Canadian building permit numbers for
December are due on Tuesday.
    
In the Latin American economic calendar, Brazil's government statistics agency IBGE is set to
release inflation numbers, as measured by the benchmark IPCA index on Thursday. On Wednesday,
the same agency is expected to publish the retail sales numbers for December. Separately, on the
same day, the central bank will release the country's trade balance for January and the primary
budget balance for December. On Tuesday, inflation data, as measured by the IGP-DI price index,
is expected to be released. Meanwhile, Brazil's central bank is scheduled to report the
country's bank lending data for December on the same day. The Bank of Mexico is set to announce
its interest rate policy on Thursday. The country's statistics agency, INEGI, is scheduled to
release headline and core inflation numbers on the same day. On Friday, Mexico's industrial
output for the month of December will be published. Separately, Argentina's INDEC statistics
agency is set to release December's industrial output data on Tuesday. On Thursday, Chile's
statistics agency INE is expected to report inflation numbers for January.

 (Compiled by Malini K)
 ((Malini.K@thomsonreuters.com;))