The financial markets will witness a number of important corporate and economic events, from the potential default of Puerto Rico to a plethora of earnings reports, during the week of May 2-6, 2016.
- The markets are expecting Puerto Rico to default as the commonwealth is said to fall short of paying $422 million to holders of bonds from the Government Development Bank. It owes a total of $470 million on various securities. A default is believed to be inevitable because the commonwealth’s treasury and the GDB lack the sufficient liquidity for upcoming debt payments.
- BMW schedules to release its first-quarter earnings. The car company is battling legal problems which have sent its shares down 15%. BMW is suffering a 10% sales drop in the U.S. in the first quarter, while its rival Mercedes-Benz is enjoying a surge in sales. In fact, Mercedes-Benz is beating BMW in the U.S. and China, the two key markets of both companies. Mercedes-Benz’s sales in the U.S. increased by 1% in the first quarter, and it’s become the number two seller in China. Nonetheless, the analysts are optimistic about BMW’s earnings, predicting earnings per share to rise 8%.
- A handful of companies will also release their earnings, including Commerzbank, Lufthansa and UBS.
- The Reserve Bank of Australia will hold a meeting to discuss the next course of action regarding the interest rate. JPMorgan expects the RBA to cut the rate by 0.25 percentage points and follow up with a 25 basis points cut in August.
- The ECB plans a governing council meeting. No interest rate announcements are expected, but it will release an economic bulletin, which provides comprehensive analysis of economic and monetary developments. It will serve as the basis for the council’s policy decision.
- 21st Century Fox, Adidas, Allianz, Deutsche Telekom, HeidelbergCement, among others, will release their earnings reports.
- Activision Blizzard will release its earnings today. The company made a big splash last November with the $5.9 billion takeover of Candy Crush developer King. To put the deal in perspective, Disney acquired Marvel Entertainment for $4.2 billion and Lucasfilm for $4.1 billion. The investors and analysts will pay close attention to the company’s earnings to determine if the deal pays off.
- GoPro and TripAdvisor will also plan their earnings announcements today.
- The Reserve Bank of Australia will release a quarterly statement on its monetary policy, which will assess the current economic conditions and the prospects for inflation and output growth.
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