This week will be packed with quarterly updates on both sides of the pond. These include Asos, Deliveroo, Rio Tinto, Antofagasta and Netflix in London and Goldman Sachs in New York.
The Bank of England will consider the inflation numbers on Wednesday. Other data morsels include consumer confidence, public sector borrowing, and retail sales.
MONDAY, 17 OCTOBER
China remains the world’s largest growth engine and the Chinese Communist Party’s National Congress Meeting is one of the most significant global events. It begins Sunday.
On Monday, reactions were quieter than usual. Analysts at ING expect “a lot buzz and market talk” following the congress meeting. Economic growth data will be available a day later.
Xi Jinping is widely believed to be in power for a third five-year term. However, country watchers believe that there could be more surprises.
Julian Evans-Pritchard (senior China economist at Capital Economics) said that it’s not clear if retirement norms set aside for Xi will apply to other officials.
“If they do, all top economic policy bureaucrats, including the premier and PBOC governor, may be forced to resign in March.
“The Congress should provide some clues about their successors and how Xi prioritizes loyalty over competence.”
SeraphimSpace Investment Trust will have some time to defend its position after the 57% drop in its shares this year.
According to the latest data from the space-tech investor, net assets stood at £250m at March’s end. This includes £188m in investments and £62.3m in cash.
Seraphim’s valuation was severely affected by its listed investments, Arqit Quantum, and Spire Global. These listed investments represented 14.3% of NAV as of March after they merged with SPACs vehicles. Their respective values fell significantly, 59%, and 66%, respectively, in the quarter ending June 30.
The company will likely argue that the space industry is still young and has more-than-galactic potential growth. It also offers many vital tools to monitor and address climate change and sustainability issues on (current) Earth.
Important announcements to be made Monday
Finals EnSilica PLC, (AIM:ENSI), Seraphim Space Investment Trust
Interims: Naked Wines PLC (AIM:WINE, OTCQX:NWINF)
AGMs: Arcontech Group PLC (AIM:ARC), Barratt Developments PLC (LSE:BDEV)
Economic announcements Rightmove UK house prices index
US earnings Monday Bank of America Corp, Bank of New York Mellon
TUESDAY, 18 OCTOBER
Tuesday’s calendar entry has everything. Rio Tinto will reveal if the good days are over for big mining. Bellway and Ibstock, housebuilders, do the same. William Hill owner 888 holdings also reported in the wake of mixed statements by rivals in week past.
Later in the day, Netflix Inc. (NASDAQ:NFLX) will receive the ratings because its earnings come at an crucial time for the video streaming company.
Bellway PLC, (LSE:BWY) reported last in a pre-closed update in August. It stated that full-year revenues had reached a record £3.5bn while operating profits were around £650m.
It will be all about current trading and management’s outlook. With house prices expected to fall amid rising mortgage rates, sector rival Barratt reported a drop in private reservations over the past week.
Peel Hunt, a broker, stated that the order book was at £2.1bn as of August. However, more recent trading patterns, levels of sales interest, and signs of stress in mortgage markets will be important.
Investors in brick-maker Ibstock Plc (LSE:IBST) will also benefit from a much-needed catch-up, as a result of its July last report.
The group reported volume increases in the mid-single digits and strong pricing trends due to higher gas prices. Second-half trading started well, and management guided to profit expectations that were ahead of the consensus.
What has happened to the demand for big builders and those in the repair, maintenance, and improvement (RMI) channel?
William Hill owner 888 Holdings PLC (LSE:888) will show if management was correct in stating in the summer that the remainder of the year should follow a “stable pattern”.
The FTSE 250-listed gambling and gaming group reported a 13% decline in revenue and a 66% decrease in pre-tax profits in its half-year results. However, revenue on a pro forma basis would have fallen by 1%.
Later in the day, Goldman Sachs will report Q2 results in the US. These numbers helped the shares rise strongly from their 18-month lows. However, they have fallen back 15% since then due to concerns about the Fed’s tightening cycles on key markets.
It will be important to assess the amount of loan loss provisions and what bosses have to say about the outlook for the remainder of the year.
The International Monetary Fund has forecasted that China’s growth will be 3.2% in 2018, down from 8.1% in 2021.
Important announcements to be made on Tuesday
Trading updates: 888 Holdings PLC (LSE:888), Ibstock PLC (LSE:IBST), Integrafin Holdings PLC, Moneysupermarket.com – (LSE MONY), Group PLC, Ninety One PLC – (LSE:N91), Rio Tinto PLC (LSE :RIO), Sosander PLC
Interims: BP March & Partners, FD Technologies PLC (AIM:FDP)
Finals: Bellway PLC (LSE:BWY), Essensys PLC, Revolution Bars Group PLC
AGMs: Dolphin Capital (LSE:DCI) Investors Ltd, Pantheon International PLC (LSE:PIN), Tlou Energy Ltd (AIM:TLOU, ASX:TOU, BSE:TLOU)
Economic announcements Capacity Utilisation
US earnings Goldman Sachs, Johnson & Johnson, Surgical (NASDAQ :ISRG), Netflix, United Airlines, Hasbro
WEDNESDAY, 19 OCTOBER
The earnings report from Tesla Inc will come later in the day. This is a major event for investors on both sides. There will also be plenty of London companies to keep investors busy.
ASOS PLC (LSE:ASC) has confirmed that this year’s profits will be below the £20-60mln guidance. This is due to low sales growth.
According to Shore Capital, this will be Jose Antonio Ramos Calamonte’s first presentation as chief executive. He will seek to address the problems at the company that make it attractive as a target for a bid.
The financial services sector will also be a major theme of the day, with Hargreaves Lansdown PLC (LSE:HL) being the investment platform. ), and Merchant bank Rathbones Brothers PLC reporting quarterly figures.
Hargreaves is expected to report ahead of AJ Bell’s Thursday report. This will lead to consensus expectations that HL’s assets under administration will fall to £121.6bn, from almost £124bn at June-end, and the £141bn by December due to market turmoil.
However, rising interest rates should lead to increased guidance regarding cash margins. City analysts predict that Q1 revenue will increase year-on-year to £151mln.
Deutsche Bank recently forecasted that HL could see consensus upgrades regarding its cash margin after its Q123 results, but it said core flows would likely remain restricted while uncertainty continues in the UK’s macro/political climate.
Rathbones is the first of the FTSE 350’s listed lender to report this quarter. Most of the FTSE 100-listed banks will follow next week. Rathbones wealth management business should also suffer from weak markets. However, Peel Hunt analysts expect “modestly positive flows”.
Organic growth was 0.3% in the first half. Investments made in digitizing the business put a pinch on the margins.
Its bright spot, like Hargreaves’, should be interest income.
Tesla will unveil its third-quarter earnings after the New York closing bell rings.
The Elon Musk fans and Wall Street analysts and sceptics have plenty to chew on, including the “frankly embarrassing pricing”, bumpy deliveries, and unrealistic self-driving targets ( ).
Macro matters
The Office for National Statistics will release September UK inflation data on Wednesday. Economists expect to see a rise in September’s numbers back into the double digits.
The consumer prices index (CPI), which was 9.9% higher in August than one year ago, fell from 10.1% in July, which was the highest reading in 40 years. This is due to lower fuel costs and transport costs. Core CPI (which excludes fuel and food) was 6.3%.
CPIH, the Bank of England’s preferred measure that includes housing costs, increased 8.6% in July, also slightly lower than July’s 8.8%.
ING economists stated that “We see headline inflation rates and core inflation rates increasing,” “But, we believe that we are now very close to the peak, given the government’s decision not to cap household energy bills.”
The monetary policy is still quite loose in comparison to historical trends. In the early 1990s, the Base Rate was 15% and then 5% for most of the noughties.
Analysts at AJ Bell said that the Bank of England is now “in a real pickle”.
“One side is trying to curb inflation by increasing interest rates. The other isn’t wanting to do too much and send an indebted country into recession.
It will also keep an eye on the pound which is still at multi-decade lows compared to the dollar. It took an extremely long period of positive real rates of interest to stop inflation. So either the Bank of England needs to get to work or it will need to pray.
China’s GDP will rebound by 3.5% in the third trimester after lockdowns had a chilling effect on the economy in the preceding quarter. There was a 2.6% quarterly contraction, which dragged the annualised rate to 0.4% from 4.8% in quarter one, and shattered the 5.5% target.
Important announcements to be made on Wednesday
Trading updates: Antofagasta PLC(LSE:ANTO), BHP Group Ltd, (LSE :BHP; ASX :BHP), Centamin Mining PLC and Hargreaves Lansdown PLC. (LSE :HL. ), Just Eat Takeaway.com PLC. Man Group PLC. (LSE :EMG), Network International Holdings PLC. (LSE :NETW), Rathbones Group PLC. (LSE :RAT, OTC :RTBBF), Spectris PLC. (LSE :SXS).
Finals: ASOS PLC (LSE:ASC)
AGMs Centamin PLC LSE:CEY TSX:CEE OTC:CELTF ; Frasers Group PLC LSE:FRAS Hargreaves Lansdown PLC Made Tech Group PLC (AIM:MTEC , SME Credit Realisation Fund Limited
Economic announcements: MBA Mortgage Applications (US), Building Permits, Housing Starts (US), Crude Oil Inventories(US), Consumer Price Indexes (UK), Producer Price Indexes (UK), Retail Price Indexes (UK)
US earnings Abbot Labs IBM LAM Research Baker Huges Alcoa (NYSE.AA), Procter & Gamble, International Business Machines and Tesla
THURSDAY, 20 OCTOBER
Dunelm Group PLC, (LSE:DNLM) reported a 6% drop in its previous quarter. With headwinds including this summer heatwave, the first quarter of the new year will be difficult.
Analysts see silver linings in September’s trading, which could help inform the latest quarterly update ( view the full Dunelm preview).
Builders merchant Travis Perkins, (LSE:TPK) last updated the market in August. Sales were up 7.9% on a like-for-like base, but operating profit was flat across all divisions. This was despite price inflation of 14%.
This Thursday’s trading update will focus on current market demand.
Although merchanting saw strong demand in the first quarter, housebuilders are still reeling from wider housing market shocks. Could this have caused a softening of the demand, as it did in Toolstation DIY in the first quarter?
A National Express Group PLC update (LSE:NEX ) will be available. This update comes after saw its shares surge in July following strong first-half results.
After reporting the highest revenue growth in more than a decade in the first six months, the transport operator has maintained its guidance for the year. This was due to a strong rebound in passenger demand.
AJ Bell, Schroders, and St James’s Place PLC have several financial statements scheduled.
Deutsche Bank recently warned its clients that although top-down market headwinds have mostly been reflected by share prices, there may still be bottom-up concerns in the shares in the next six months.
Analysts at St James’s suggested that they believe there could be a reduction in guidance for its Q3 results.
A summit of EU leaders is being held, as well as US job numbers and housing data.
Important announcements on Thursday
Trading updates: AJ Bell PLC (LSE:AJB), Bunzl PLC (LSE:BNZL), Dechra Pharmaceuticals PLC, National Express PLC, Rentokil Initial PLC (LSE:RTO), Schroders PLC (LSE:SDR), Schroders PLC , SEGRO PLC , St James’s Place PLC, Travis Perkins (LSE TPK)
AGMs Abrdn UK Smaller Companies Growth Trust PLC Argo Group Limited Dechra Pharmaceuticals PLC, Gateley Holdings PLC (AIM:GTLY
Ex-divs to Reduce FTSE 100 By: 1.64 Points (BAE Systems, Smiths Group, LSE:SMIN).
Economic announcements Continuing Claims, Initial Jobless Claims, Philadelphia Fed Index (US), Existing Homes Sales.
US earnings American Airlines, AT&T Blackstone, CSX Freeport McMoRan Philip Morris International, Snap Inc
FRIDAY 21 OCT.
In the days leading up to Deliveroo’s third-quarter earnings call, investors still have a lot to learn about.
The London Stock Exchange Group PLC (LSE:LSEG) is expected to generate equity trading income in a similar way to a year ago, however, the slowdown in corporate deal-making may be impacting its capital market revenues, according to Steve Clayton, Hargreaves Lansdown, fund manager.
The exposure to the US market via the Russell Indices business will prove to be a problem given Wall Street’s weakness. However, the sterling drop could save the day. Clayton stated that the LSEG could be one of the most reliable reporters during the current results season because the group is able to access substantial amounts of self-help due to the earlier acquisition of Refinitiv.
Holiday Inn owner Intercontinental Hotels Group PLC(LSE:IHG). reported back in August that the US was leading the recovery from the pandemic disruption. The board decided to reinstate the dividend and announced a US$500m share purchase back.
“The dimming economic outlook has undoubtedly weighed on this sector, but a data breach that was discovered in September brought some unwanted publicity about the company’s handling of customer data and disrupted booking systems,” stated Michael Hewson, CMC Markets.
Macro matters
The September GfK Consumer Confidence Index and Flash PMI Services numbers will be available.
The September consumer confidence index fell five points, the lowest level since 1974 when records were first kept.
PM Liz Truss, and Kwasi Kwarteng, the former chancellor, are likely to have contributed to the woes since the survey was taken. This means that a new low is possible.
In August, government borrowing soared to £11.8bn, nearly twice what the Treasury’s independent forecaster expected. This was despite high inflation which pushed interest payments up to a record-setting level for that month.
UK retail sales fell 1.6% in August, but the decline will not be as severe in September due to the cooler weather and new fall clothing lines.
Important announcements on Friday
Trading updates: Deliveroo PLC (LSE:ROO), Intercontinental Hotels Group PLC (LSE:IHG), London Stock Exchange Group PLC (LSE:LSEG)
AGMs Trafalgar Property Group PLC (AIM:TRAF)
Economic announcements GFK Consumer Confidence UK, Public Sector Net Borrowing UK, Retail Sales UK, Flash PMI Services UK
US earnings by American Express, Schlumberger Ltd., Verizon Communications, Seagate
