By Ben Fox Rubin
With Alcoa Inc. (AA) scheduled to report quarterly results on
Tuesday, the third-quarter earnings session should kick off in
earnest next week. Wells Fargo & Co. (WFC) and J.P. Morgan
Chase & Co. (JPM) are scheduled to report Friday.
Also next week, reports on small business and inflation, as well
as the biggest group of initial public offerings in months, are
expected.
Two Major Financial Firms Reporting Earnings
As earnings session starts to heat up next week, two U.S.
banking giants will weigh in with their latest third-quarter
numbers on Friday. J.P. Morgan Chase & Co. (JPM) should give
investors an early window into the recent strength of investment
banking, while Wells Fargo & Co. (WFC) will provide a view of
traditional banking's strength.
J.P. Morgan Chase & Co. (JPM) is expected to post higher
earnings, benefiting from a favorable comparison to a lackluster
quarter a year earlier. The company earlier this year posted
billions in losses from a derivative-trading debacle known as the
"London Whale," though it has signaled that most of the losses are
behind it.
Meanwhile, analysts predict Wells Fargo will report improved
profit on the continued strength of its mortgage-banking business,
notably from homeowners refinancing for lower rates. Investors will
also be looking to see if the company's commercial lending business
remains strong.
Webster Financial Corp. (WBS) and Bank of the Ozarks Inc. (OZRK)
also are expected to report their latest results.
Grab Bag of Retailers, Industrials
Aluminum producer Alcoa Inc. (AA), typically the first major
U.S. company to report quarterly results, is expected to release
its earnings Tuesday. The industrial bellwether has been struggling
in recent quarters with declining aluminum prices--a result of the
weakened global economy--and analysts forecast a profit
decline.
Yum Brands Inc. (YUM), which owns Taco Bell, KFC and Pizza Hut,
should post stronger results Tuesday, though investors will likely
focus on whether its China business--a major driver of its recent
profit gains--will continue growing at a slower pace.
Also, retailer Costco Wholesale Corp. (COST), supermarket
operator Safeway Inc. (SWY) and privately held agribusiness giant
Cargill Inc. are scheduled to report quarterly results.
Data on Small Business, Trade Deficit
Next week's varied reports will cover small business, the trade
deficit and inflation.
Small business owners have been a prime focus of the
presidential election given smaller firms' large share of job
creation.
The state of small business will be reported Tuesday by the
National Federation of Independent Business. The optimism index is
expected to rise to 93.5 in September, from 92.9 in August, says
the median forecast of economists surveyed by Dow Jones
Newswires.
The U.S. trade deficit is on tap Thursday. Mostly because of
higher oil prices, economists think the August deficit widened to
$44.3 billion from $42.0 billion in July.
Inflation readings will be released Thursday, with the import
price index, and Friday, with the producer price index. Economists
think higher oil prices pushed up total import prices by 0.8% in
September.
Bumper Crop of IPOs
There are nine initial public offerings scheduled for next week,
the most since the week of March 26, according to Dealogic. Workday
Inc., Shutterstock Inc. and Realogy Holdings Corp. are among the
group.
Realogy, the largest residential real-estate services firm in
the country, owns and franchises residential real-estate
brokerages, including Century 21, Coldwell Banker, ERA and Better
Homes and Gardens Real Estate.
The company is seeking to go public some five years after Apollo
Management LP took it private at the height of the housing market
in a highly leveraged $8.5 billion deal. It has been rough sailing
for Realogy since then as its business deteriorated in the housing
bust.
Workday provides business-management software for payroll,
financial management, time tracking and employee expense
management. Shutterstock, a photography agency, sources content
from videographers and photographers and licenses it to businesses,
advertisers and media organizations.
AMR Pilots Push for Appeal
American Airlines pilots on Tuesday will make their case against
an immediate and unilateral overhaul of their employment terms
while they appeal the bankruptcy court ruling that gave the airline
the right to implement the changes.
In fighting to delay the judge's ruling from taking effect, the
pilots will square off against the unsecured creditors of American
parent AMR Corp. (AAMRQ). The creditors say the pilots aren't
likely to succeed in their appeal, so there is no need for any
delay.
Conferences
Among the conferences scheduled for next week are Banco BTG
Pactual SA Latin American Conference from Tuesday to Thursday in
New York City and Deutsche Bank Leveraged Finance Conference from
Tuesday to Thursday in Scottsdale, Ariz.
--Jacqueline Palank and Kathleen Madigan contributed to this
story.
Write to Ben Fox Rubin at ben.rubin@dowjones.com
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