By Saabira Chaudhuri
On tap for the week ahead are earnings from retailers Macy's
Inc. (M), Kohl's Corp. (KSS), and Wal-Mart Stores Inc. (WMT).
Analysts at Retail Metrics recently identified some softness
across the retail sector, raising a cautionary flag as companies
head into the back-to-school selling season.
"Higher year-on-year gas prices, the payroll tax increase,
summer doldrums, lack of wage gains, and competition from housing,
autos and durable goods kept a lid on consumer spending in
traditional retailers this month," they said.
Notable initial public offerings likely to price include
Envision Healthcare Holdings Inc. and Third Point Reinsurance Ltd.,
the reinsurance company started by hedge-fund manager Dan Loeb.
On the U.S. economic indicator calendar next week: two major
inflation indices, jobless claims data and the housing starts
report.
Quarterly Earnings Due From Macy's, Wal-Mart And Others
Retailers reporting include Macy's, Wal-Mart and Nordstrom Inc.
(JWN). Ahead of Macy's results, analysts at Stern Agee said
investors are "guarded" in approaching Macy's quarter as chatter
about softer department store same-store sales is omnipresent.
Also reporting this week are Chinese Internet firms Sina Corp.
(SINA), Renren Inc. (RENN) and Netease Inc. (K3MD.SG, NTES).
On Thursday, analysts at Maxim Group upgraded Sina to buy from
hold, noting that Chinese e-commerce giant Alibaba Group Holding
Ltd. has recently started to allow Sina's Weibo users to shop on
its e-commerce platforms, helping it regain market share from
Tencent Holdings Ltd. (0700.HK, TCEHY) whose WeChat--a top
competitor of Weibo--Alibaba has blocked from its platforms.
Economic Data and Indicators
The Treasury budget, released Monday, is significant for
investors because of the relationship between the size of the
budget deficit and the supply of Treasury securities. The higher
the deficit, the more Treasury notes and bonds the government must
sell to finance its operation. Investors can also gain insight into
the state of the economy by looking at the government's tax
receipts.
The Producer Price Index is released on Wednesday by the Bureau
of Labor Statistics. This family of indexes measure the average
change over time in the prices received by domestic producers of
goods and services. The PPI helps investors anticipate inflationary
consequences in coming months. The Consumer Price Index--a measure
of the change in the average price level of a fixed basket of goods
and services purchased by consumers--is unveiled on Thursday.
Jobless claims data is also released on Thursday. By tracking
the number of jobless claims, investors can gain a sense of how
tight, or how loose, the job market is.
Housing starts--possibly the most closely followed report on the
housing sector--is released on Friday. Housing starts reflect the
commitment of builders to new construction activity. Purchases of
household furnishings and appliances quickly follow.
Envision Healthcare, Third Point Reinsurance Expected to Price IPOs
Envision Healthcare Holdings Inc. expects its initial public
offering to price Tuesday. The medical-outsourcing company first
filed plans in June for an IPO. Late last month, it said it expects
the IPO of 35 million shares to price at $20 to $23 a share.
Envision provides services such as medical transportation and
emergency care, working with a network of affiliated
clinicians.
Also, Third Point Reinsurance Ltd.'s IPOs is expected to price
on Wednesday. Earlier in August, Third Point, the reinsurance
company started by hedge-fund manager Dan Loeb, had said it
expected the IPO of 22.2 million shares would likely price between
$12.50 and $14.50 a share.
American Airlines Seeks Bankruptcy Exit
American Airlines' plan to exit bankruptcy by way of a merger
with US Airways Group Inc. (LCC) could soon get wings.
The Manhattan bankruptcy court on Thursday will consider
confirming the Chapter 11 reorganization plan of AMR Corp. (AAMRQ),
which describes how American's parent company will pay its
creditors and emerge from the bankruptcy case it launched in
November 2011.
Meanwhile, on Friday, Eastman Kodak Co. (EKDKQ) will seek the
Manhattan court's approval for a settlement in which it will put up
millions of dollars to resolve environmental liabilities at its
corporate headquarters.
Write to Saabira Chaudhuri at saabira.chaudhuri@dowjones.com
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