Daily Agenda: The Week Ahead, August 10 – 15, 2015
Key economic data releases come out of China and Europe; Banco do Brasil reports second-quarter earnings; Siena, Italy holds centuries-old traditional horse race.
Chinese economic data and growth figures in Europe will continue to be major macro drivers for market sentiment. The panic among Chinese stock investors has neither abated nor brought contagion to other global markets, while a Grexit appears to have been averted. Rising tension is nonetheless apparent, as implied volatility measures rose across multiple asset classes and geographies late this past week. As earnings season draws to a close, a few key reports are on deck, including a consumer staples company that is being sized up by activist investors and a Brazilian bank caught in a government scandal.
Monday, August 10: The Kraft Heinz Company will release second-quarter 2015 earnings after equity markets close. Late last week New York–based hedge fund firm Pershing Square Capital Management, helmed by activist investor Bill Ackman, unveiled a $5.5 billion stake in suburban Chicago–based snack food manufacturer Mondelez International, which spun out of Kraft in 2012. Kraft, which merged with Heinz this year, is being touted by Ackman as a possible buyer for Mondelez, reuniting the brands.
Tuesday, August 11: ZEW publishes economic sentiment indicators for primary euro zone economies. While the headline index for the common currency zone has been trending down since April on Greek-sparked concern, the German-specific index has been a particular focus for investors after reaching the lowest level since November 2014 in July.
Wednesday, August 12: After the announcement of critical inflation and monetary data over the weekend, China’s monthly economic data release schedule resumes with the announcement of retail sales, fixed investment and industrial production figures for July. Any signal that fundamentals are continuing to soften will be unwelcome news to investors in Chinese stock markets, which continued to come under intense selling pressure last week, despite efforts by regulators to intervene.
Thursday, August 13: Second-quarter GDP for France is expected to register a modest gain with increased consumption, investment and government spending as prime catalysts, with the Banque de France, the country’s central bank, projecting a rise of 0.2 percent for the period after lowering estimates in July. Despite a marginally improving situation, with debt levels estimated approaching 98 percent there are growing concerns among conservative parties in the national assembly that structural reforms may be necessary to achieve GDP sufficient to support national obligations.
Friday, August 14: Banco do Brasil will report results for the second quarter on Thursday. Headquartered in Brasília, the firm, which traces its roots to 1808, is both the oldest bank in Brazil and largest by assets. The publicly traded, state-controlled bank is embroiled in the ongoing Petrobras political scandal as it oversaw transfers of funds now being scrutinized by prosecutors as part of greater investigations of alleged fraud in Brazil’s federal government.
Saturday, August 15: Palio dell’Assunta will not occur until Sunday, but the party will be in full swing by Saturday as nearby residents and tourists stream into the Italian city of Siena to enjoy the traditional celebration marking the Assumption of Mary. The race itself is based on traditions predating the Renaissance with a horse and rider representing all ten of the city’s districts. Riding bareback around the tight turns of the Piazza del Campo, the race normally finishes with multiple riders falling and thrown to the ground.