FOMC Meeting, Goldman Earnings, ZEW Index: European Week Ahead

By Daniela Silberstein

Sept. 12 (Bloomberg) -- The Federal Reserve's interest-rate decision and earnings from U.S. banks including Goldman Sachs Group Inc. may move stock markets next week.

Reports on European consumer prices and German investor sentiment will also be watched. Pernod-Ricard SA, the world's second-largest liquor maker, and Kingfisher Plc are among European companies scheduled to report results.

The Dow Jones Stoxx 600 Index advanced 2.2 percent to 278.22 this week as of 12:51 p.m. in London. The Stoxx 50 increased 2.8 percent, while the Euro Stoxx 50, a benchmark for nations sharing the euro, added 2.1 percent.

European stocks climbed today as the U.S. Treasury and the Federal Reserve have been working with Lehman Brothers Holdings Inc. on a sale of the country's fourth-largest securities firm, and a deal may be announced before Asian markets open Sept. 15, a person with knowledge of the matter said.

``The focus next week will continue to be the U.S. banking sector with speculation Lehman Brothers will be bought and the Federal Reserve's interest-rate decision,'' said Manfred Hofer, head of equities analysis at LGT Capital Management in Pfaeffikon, Switzerland, which manages the equivalent of $90.3 billion. ``Any positive developments from the Fed or the resolution of the Lehman problem over the weekend could trigger a trend reversal for European markets in the short term.''

Fed policy makers are scheduled to announce their interest- rate decision Sept. 16. Fed fund futures show an 82 percent chance that the committee will leave the cost of borrowing unchanged at 2 percent. Traders see a 14 percent chance of a quarter-point cut.

Goldman Sachs

Goldman Sachs Group Inc., the U.S.'s largest securities firm, is scheduled to report earnings Sept. 16. Morgan Stanley, the second-biggest, will follow Sept. 17.

Lehman this week posted a $3.9 billion third-quarter loss on $5.6 billion of writedowns, worse than the $2.2 billion loss analysts had predicted, pushing global writedowns and credit losses caused by the collapse of the U.S. mortgage market to $512 billion, according to Bloomberg data.

The results ``gave the first indication of how third- quarter investment banking revenues will shape up,'' Dirk Hoffmann-Becking, an equity analyst at Sanford C. Bernstein & Co. Inc. in London, wrote in a report to investors Sept. 10.

A Sept. 16 European Union statistics office report may show inflation in August for countries that share the euro stayed at 3.8 percent, according to the medium estimate of nine economists surveyed by Bloomberg News.

German Confidence

The ZEW Center for European Economic Research will report figures on German investor confidence the same day. Sentiment in Europe's largest economy probably rose to minus 52.8 from minus 55.5 in September, the median estimate of a Bloomberg survey of economists showed.

Investor sentiment in the euro region probably increased to minus 53.5 from minus 55.7, according to Bloomberg data.

The surveys ``will be closely monitored since this is the first indication of economic confidence in the third quarter,'' Deutsche Bank AG analysts Greg Poole and Mairead Smith in London wrote in a report to investors today.

Pernod-Ricard is due to post full-year results Sept. 18. The distiller of Beefeater gin July 24 raised its forecast for annual profit after selling more premium whiskies and Havana Club rum.

``The key issue will be their expectations for the coming year,'' Graeme Eadie, an analyst at Deutsche Bank in Paris, wrote in a preview released Sept. 1. ``We remain cautious for the outlook for the new fiscal year.'' Deutsche Bank expects the spirit maker to report 12 percent organic profits growth in the fiscal year.

Kingfisher, Europe's largest home-improvement retailer, is scheduled to report first-half earnings Sept. 18. Carnival Plc, the world's largest cruise line operator, is due to publish earnings the following day.

To contact the reporter on this story: Daniela Silberstein in Zurich at dsilberstei2@bloomberg.net.