NEW YORK, May 6 (Reuters) - Following is the view from editors in the Americas on the top stories for the week ahead.
Watch Reuters Insider's Week Ahead:
http://link.reuters.com/xyg49r
HIGHLIGHTS:
* U.S.-China talks but major progress seen unlikely
* Date seen showing U.S. retail sales up, prices in check
* Cisco, Disney, Macy's among earnings highlights
* Lawmakers and White House seek to avert US debt default
* USDA gives assessment of US corn, soybean, cotton crops
EXPECTATIONS LOW FOR HIGH-LEVEL U.S.-CHINA TALKS
U.S. and Chinese officials will use high-level talks in Washington on Monday and Tuesday to air grievances over everything from the value of the yuan to arms sales to Taiwan and controlling North Korea. Closely watched because the two economies are the world's largest, the once-a-year Strategic and Economic Dialogue nonetheless does not typically produce hard-edged agreements and analysts expect little change this year. But it does provide a chance for U.S. Treasury Secretary Timothy Geithner and Secretary of State Hillary Clinton to lay out an agenda for the future with China's Vice-Premier Wang Qishan and State Councilor Dai Bingguo. The more firmly they set a course for keeping bilateral tensions in check, the better, since attention in both capitals will soon turn to domestic politics: the U.S. presidential elections in 2012 and orchestrating the selection of a successor to China's president by 2013.
U.S. RECOVERY SLOWDOWN FEARS SUBSIDE
Data next week should show the U.S. economy fared a bit better as the second quarter started, with inflation rising only moderately and consumers taking high energy costs in their stride. April retail sales, due on Thursday, are expected to have risen 0.6 percent after a 0.4 percent gain the prior month. While gasoline prices will account for a portion of the increase, consumers likely increased their purchases of a range of goods. Other reports should show the increase in wholesale and consumer inflation slowed last month. Economists expect the report on consumer prices on Friday to show the core gauge up a modest 0.2 percent after gaining 0.1 percent in March. With employment showing strength for a third straight month in April, consumer morale likely perked up. The Reuters/University of Michigan index of consumer sentiment on Friday is expected to have edged up to 70 in early May from 69.8 in April.
DEBT CEILING DANCE
Democrats and Republicans in Congress and the White House work towards a compromise that would avert a U.S. debt default, with House Speaker John Boehner expected to clarify the Republican approach in a New York speech on Monday. The parties are trying to reach agreement on the framework for cutting the long-term U.S. deficit, that could clear the path for a vote on raising the $14.3 trillion debt ceiling. Republicans have edged toward a White House plan that would cut some spending now and set long-term deficit reduction targets, but said more difficult decisions on taxes and healthcare spending would have to wait until after the 2012 elections. The budget deficit is expected to reach $1.4 trillion this year and is a major worry for investors.
CORN, SOYBEAN CROP REPORT
The May crop from the U.S. Department of Agriculture is always a big one and this year's could be particularly interesting. The report will give the USDA's first assessment of U.S. corn, soybean and cotton crops for the new year, as well as for sugar and meat. U.S. winter wheat is also important because it contains the first hard data for the current year's crop. Globally USDA gives its first projections for world grains, cotton and soybeans. So with food prices at a record high, and the flooding in the United States severely hampering this year's harvest, the report will be closely watched for signs over whether the United States and other big producing countries can help ease razor-thin supplies globally. Commodities in general might be getting hit hard but the fundamentals for agriculture still look strong.
HEALTH SUMMIT
The CEOs of AstraZeneca, Sanofi-Aventis, Biogen, Celgene, Medco, Covidien, and Allergan are among those attending the Reuters Health Summit in New York (Monday through Thursday), where they will offer their views on the future of an industry whose business model is unraveling after years of bankable growth. During the event, which will also feature the FDA's top drug official, the CEOs are expected to talk about plans to cope with shifts in the market as use of medical services stagnates in an economy taht remains weak.
GOOGLE/APPLE
A Senate subcommittee holds a hearing on Tuesday to discuss mobile privacy, particularly cellphones and tablets. Officials from Google and Apple, which are embroiled in controversy over location tracking, are expected to testify. Google also holds its two-day annual developer conference in San Francisco, starting on Tuesday. Themes are likely to include Google's increasing influence and efforts in the smartphone market with its popular Android operating system, and its ongoing efforts in social networking, where Facebook rules the roost.
EARNINGS
The spring earnings season is nearing its end, but not before several big names open their books, including Walt Disney (Tuesday), Cisco and Macy's (both Wednesday). Cisco may not be the technology bellwether it was a short time ago, but it is still widely watched. It is also suddenly under the gun after CEO John Chambers laid bare the company's flaws recently. Walt Disney is the last of the major media companies to report earnings and it finds itself under pressure to post blockbuster results, or risk a sell-off by investors. In addition, Macy's leads a week of department store chains earnings that includes Kohl's and Nordstrom.
CHILE, PERU RATE DECISIONS
The central banks of Chile and Peru are likely to raise interest rates again to tamp inflation despite some signs that they are having some success in taming the surge in food and energy prices. Policymakers in both countries are expected to hike their benchmark rates by a further 25 basis points on Thursday. On the same day, Brazilian retail sales data and Mexican industrial production will help investors read the pulse of Latin America's two biggest economies.
U.S. STOCKS SEEN GAINING
Barring another commodities panic, Wall Street will look to resume its rally. Robust earnings and a pleasantly surprising jobs report provide the support, so the question is whether stocks have the gumption or gas to drive on. Rallying stocks would put the cement shoes back on the dollar since the Fed is still no closer to raising its super-low interest rates. With benchmark yields near 1-1/2 month lows, the bond market will run into resistance from $72 billion worth of Treasury auctions, though there's still no sign that the political impasse over the national debt has rattled fixed income investors.
QUEBEC MINING PLAN
Canada's earnings season starts to wind down, with results from companies like Valeant Pharmaceuticals, which failed in a bid for drug maker Cephalon. Trade data on Wednesday will show if the raw-materials focused economy is finding markets for its goods. In Quebec, the government plans to introduce a new Plan Nord, a 25-year, multi-billion dollar project to help develop mining, energy and forestry in the north of the province. Quebec is Canada's largest province by area, with a territory that stretches from the Gulf of St Lawrence deep into the Arctic.
(Compiled by Martin Howell, (646) 223-6252) COPYRIGHT Copyright Thomson Reuters 2011. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
Watch Reuters Insider's Week Ahead:
http://link.reuters.com/xyg49r
HIGHLIGHTS:
* U.S.-China talks but major progress seen unlikely
* Date seen showing U.S. retail sales up, prices in check
* Cisco, Disney, Macy's among earnings highlights
* Lawmakers and White House seek to avert US debt default
* USDA gives assessment of US corn, soybean, cotton crops
EXPECTATIONS LOW FOR HIGH-LEVEL U.S.-CHINA TALKS
U.S. and Chinese officials will use high-level talks in Washington on Monday and Tuesday to air grievances over everything from the value of the yuan to arms sales to Taiwan and controlling North Korea. Closely watched because the two economies are the world's largest, the once-a-year Strategic and Economic Dialogue nonetheless does not typically produce hard-edged agreements and analysts expect little change this year. But it does provide a chance for U.S. Treasury Secretary Timothy Geithner and Secretary of State Hillary Clinton to lay out an agenda for the future with China's Vice-Premier Wang Qishan and State Councilor Dai Bingguo. The more firmly they set a course for keeping bilateral tensions in check, the better, since attention in both capitals will soon turn to domestic politics: the U.S. presidential elections in 2012 and orchestrating the selection of a successor to China's president by 2013.
U.S. RECOVERY SLOWDOWN FEARS SUBSIDE
Data next week should show the U.S. economy fared a bit better as the second quarter started, with inflation rising only moderately and consumers taking high energy costs in their stride. April retail sales, due on Thursday, are expected to have risen 0.6 percent after a 0.4 percent gain the prior month. While gasoline prices will account for a portion of the increase, consumers likely increased their purchases of a range of goods. Other reports should show the increase in wholesale and consumer inflation slowed last month. Economists expect the report on consumer prices on Friday to show the core gauge up a modest 0.2 percent after gaining 0.1 percent in March. With employment showing strength for a third straight month in April, consumer morale likely perked up. The Reuters/University of Michigan index of consumer sentiment on Friday is expected to have edged up to 70 in early May from 69.8 in April.
DEBT CEILING DANCE
Democrats and Republicans in Congress and the White House work towards a compromise that would avert a U.S. debt default, with House Speaker John Boehner expected to clarify the Republican approach in a New York speech on Monday. The parties are trying to reach agreement on the framework for cutting the long-term U.S. deficit, that could clear the path for a vote on raising the $14.3 trillion debt ceiling. Republicans have edged toward a White House plan that would cut some spending now and set long-term deficit reduction targets, but said more difficult decisions on taxes and healthcare spending would have to wait until after the 2012 elections. The budget deficit is expected to reach $1.4 trillion this year and is a major worry for investors.
CORN, SOYBEAN CROP REPORT
The May crop from the U.S. Department of Agriculture is always a big one and this year's could be particularly interesting. The report will give the USDA's first assessment of U.S. corn, soybean and cotton crops for the new year, as well as for sugar and meat. U.S. winter wheat is also important because it contains the first hard data for the current year's crop. Globally USDA gives its first projections for world grains, cotton and soybeans. So with food prices at a record high, and the flooding in the United States severely hampering this year's harvest, the report will be closely watched for signs over whether the United States and other big producing countries can help ease razor-thin supplies globally. Commodities in general might be getting hit hard but the fundamentals for agriculture still look strong.
HEALTH SUMMIT
The CEOs of AstraZeneca, Sanofi-Aventis, Biogen, Celgene, Medco, Covidien, and Allergan are among those attending the Reuters Health Summit in New York (Monday through Thursday), where they will offer their views on the future of an industry whose business model is unraveling after years of bankable growth. During the event, which will also feature the FDA's top drug official, the CEOs are expected to talk about plans to cope with shifts in the market as use of medical services stagnates in an economy taht remains weak.
GOOGLE/APPLE
A Senate subcommittee holds a hearing on Tuesday to discuss mobile privacy, particularly cellphones and tablets. Officials from Google and Apple, which are embroiled in controversy over location tracking, are expected to testify. Google also holds its two-day annual developer conference in San Francisco, starting on Tuesday. Themes are likely to include Google's increasing influence and efforts in the smartphone market with its popular Android operating system, and its ongoing efforts in social networking, where Facebook rules the roost.
EARNINGS
The spring earnings season is nearing its end, but not before several big names open their books, including Walt Disney (Tuesday), Cisco and Macy's (both Wednesday). Cisco may not be the technology bellwether it was a short time ago, but it is still widely watched. It is also suddenly under the gun after CEO John Chambers laid bare the company's flaws recently. Walt Disney is the last of the major media companies to report earnings and it finds itself under pressure to post blockbuster results, or risk a sell-off by investors. In addition, Macy's leads a week of department store chains earnings that includes Kohl's and Nordstrom.
CHILE, PERU RATE DECISIONS
The central banks of Chile and Peru are likely to raise interest rates again to tamp inflation despite some signs that they are having some success in taming the surge in food and energy prices. Policymakers in both countries are expected to hike their benchmark rates by a further 25 basis points on Thursday. On the same day, Brazilian retail sales data and Mexican industrial production will help investors read the pulse of Latin America's two biggest economies.
U.S. STOCKS SEEN GAINING
Barring another commodities panic, Wall Street will look to resume its rally. Robust earnings and a pleasantly surprising jobs report provide the support, so the question is whether stocks have the gumption or gas to drive on. Rallying stocks would put the cement shoes back on the dollar since the Fed is still no closer to raising its super-low interest rates. With benchmark yields near 1-1/2 month lows, the bond market will run into resistance from $72 billion worth of Treasury auctions, though there's still no sign that the political impasse over the national debt has rattled fixed income investors.
QUEBEC MINING PLAN
Canada's earnings season starts to wind down, with results from companies like Valeant Pharmaceuticals, which failed in a bid for drug maker Cephalon. Trade data on Wednesday will show if the raw-materials focused economy is finding markets for its goods. In Quebec, the government plans to introduce a new Plan Nord, a 25-year, multi-billion dollar project to help develop mining, energy and forestry in the north of the province. Quebec is Canada's largest province by area, with a territory that stretches from the Gulf of St Lawrence deep into the Arctic.
(Compiled by Martin Howell, (646) 223-6252) COPYRIGHT Copyright Thomson Reuters 2011. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.