Earnings season picks up next week, with several big-name
financial and technology companies scheduled to report
fourth-quarter and full-year results.
Renewable Energy Group Inc. is planning to launch its initial
public offering next week, marking the year's first U.S. IPO.
Markets will observe a report on December housing starts on
Thursday and existing home sales data on Friday. The U.S.
government will also release reports on last month's producer and
consumer prices.
Weak Earnings Expected From Financial Firms
J.P. Morgan Chase & Co. (JPM) earlier Friday reported a 23%
drop in fourth-quarter profits due to weakness in
investment-banking operations, offering a glimpse into what is
largely expected to again be a bleak quarter for the nation's
largest financial institutions.
Turbulent capital markets and sluggish consumer borrowing are
expected to weigh on the results of Citigroup Inc. (C) and Bank Of
America Corp. (BAC), which have sizable capital markets operations.
Citi reports on Tuesday and BofA reports Thursday.
Goldman Sachs Group Inc. (GS) and Morgan Stanley (MS) are also
due to report expectedly weak results on Wednesday and Thursday,
respectively, after the European debt crisis derailed trading and
deal-making activity at the end of 2011.
Other financial companies expected to report their latest
results include Wells Fargo & Co. (WFC) on Tuesday; Bank of New
York Mellon Corp. (BK), PNC Financial Services Group Inc. (PNC) and
U.S. Bancorp (USB) on Wednesday; BlackRock Inc. (BLK) and Capital
One Financial Corp. (COF) on Thursday.
Tech Companies Results To Shed Light On Consumer, Business Spending
Technology firms Apple Inc. (AAPL), International Business
Machines Corp. (IBM), Intel Corp. (INTC) and Google Inc. (GOOG) all
report Thursday afternoon, providing a broad view of consumer and
business spending patterns.
Analysts expect Apple to beat its quarterly guidance, though
some question how long Apple can maintain its growth and momentum
streak. The company's fiscal fourth-quarter earnings surged 54% but
missed expectations as sales of the company's signature smartphone
fell short of many projections.
IBM's results are expected to improve from a year earlier,
though concerns have emerged that the weak global economy is having
a negative impact on technology spending, particularly by
governments. In October, the company reported a disappointing
number of third-quarter signed service contracts, an indication of
future business, and a sequential decline in the company's backlog,
which measures the current value of work under contract.
Intel has already warned its fourth-quarter revenue will fall
about $1 billion short of its previous guidance as shortages of
hard-disk drives are expected to hurt its core personal computer
market for the next few months.
Google is once again expected to report a sharp jump in earnings
and revenue and investors will look for updates about nonsearch
ventures such as Google+.
First U.S. IPO Of 2012 To Launch Next Week
The first U.S. initial public offering of the new year comes
from Renewable Energy Group Inc., a biodiesel fuel company that is
planning to launch next week.
The company, based in Iowa, plans to sell 7.2 million shares of
stock on Thursday at a price between $13 and $15. It has applied to
list its shares on the Nasdaq under the symbol REGI.
Renewable Energy claims to be the largest producer of biodiesel
in the U.S., based on gallons made. It produces the fuel primarily
from lower cost feedstocks such as inedible animal fat, used
cooking oil, and inedible corn oil.
Housing Data, Consumer And Producer Prices Due
Next week's data on December housing starts and existing home
sales will shed light on the struggling housing sector.
U.S. home building surged to the highest level in 19 months
during November and construction permits grew, encouraging signs
for a part of the economy still struggling to get back on its feet.
Last month, the National Association of Retailers said sales of
previously occupied homes rose 4% in November and said sales for
all of 2011 were on track to hit around 4.25 million, a slight
improvement from the prior year.
The Department of Labor will release the December producer price
index and consumer price index on Wednesday and Thursday,
respectively. U.S. wholesale prices rose slightly in November amid
higher food costs, but the underlying rate of increase in producer
prices remained tame, indicating little inflation pressure. U.S.
consumer prices also held flat in November from a month
earlier.
Greece To Resume Debt Talks Wednesday
Talks between Greece and its private creditors over a planned
debt restructuring will likely resume next Wednesday, a senior
government official said Friday, amid signs that the negotiations
had stalled over key elements of a deal.
After two days of high-level discussions, bankers negotiating
the deal said the talks were on hold because of growing concerns
Greece might force through an onerous debt write-down on unwilling
bondholders, scuttling hopes of a voluntary agreement.
Greece's European partners agreed in late October to cover the
country's budget deficits over the next three years, but insisted
that private creditors share in the pain by writing off half the
debt Greece owes them.
U.S. Teams To Visit South Korea, Japan To Discuss Iran Sanctions
A delegation of U.S. officials will visit South Korea next week
to discuss plans for sanctions against Iran and Seoul's efforts to
get approval for only a limited reduction in imports of Iranian
oil.
U.S. Treasury Secretary Timothy Geithner said Washington will
also send a team to Japan next week to discuss Iran measures, after
his Japanese counterpart assured him that Tokyo will cut back on
its imports of Iranian oil.
The visits are part of a diplomatic push on sanctions by the
U.S. in Asia, which seems to have gained some traction in Japan but
not in the world's top buyer of Iranian crude, China.
U.S. To Observe Martin Luther King Jr. Day
The United States will observe Martin Luther King Jr. Day on
Monday, Jan. 16, this year one day after the civil rights leader's
birthday. As a result of the federal holiday, markets, banks, some
businesses and government offices will be closed.
Conferences
Among the significant conferences next week are the National
Retail Federation's Annual Convention and Expo in New York Sunday
through Wednesday; the Stifel Nicolaus Senior Housing &
Healthcare Real Estate Conference in Dana Point, Calif., on Monday
and Tuesday; the Noble Financial Equity Conference in Hollywood,
Fla., on Tuesday and Wednesday; the Bank of America Merrill Lynch
Global Gaming Conference in Las Vegas Thursday and Friday.
-By Nathalie Tadena, Dow Jones Newswires; 212-416-3287;
nathalie.tadena@dowjones.com
--Lynn Cowan, Min-Jeong Lee, Alkman Granitsas, Stelios Bouras,
Costas Paris and other Dow Jones Newswires staff contributed to
this article.
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