{"id":88784,"title":"Share Talk Expected Market Updates For The Week Ahead – 18th October 2021","publisher":"Share Talk","author":"sharetalk","published":"2021-10-18T13:46:49+00:00","modified":"2021-10-18T13:46:49+00:00","canonical_url":"https://www.share-talk.com/share-talk-expected-market-updates-for-the-week-ahead-18th-october-2021/","markdown_url":"https://www.share-talk.com/share-talk-expected-market-updates-for-the-week-ahead-18th-october-2021.md","json_url":"https://www.share-talk.com/share-talk-expected-market-updates-for-the-week-ahead-18th-october-2021.json","category":"Blogs","categories":["Blogs","Weekly Digest"],"tags":["Abbott Laboratories","Anglo American","AT&T","Barclays","data","Deutsche Bank","Inflation","Intel","Johnson & Johnson","Netflix","Paypal","Procter & Gamble","Schlumberger","Southwest Airlines","Tesla","The Bank of England","UK","Verizon Communications"],"featured_image":"https://i0.wp.com/www.share-talk.com/wp-content/uploads/2023/11/Stencil-Google-Chrome-2023-04-19-at-2.47.43-PM.jpeg?fit=1231%2C615&ssl=1","format":"news","language":"en-GB","content":"Next week’s announcements are worth your attention. With Barclays PLC, Tesla Inc (NASDAQ TSLA), and Netflix Inc (NASDAQ NFLX) will issue quarterly updates that will be closely monitored around the globe.\n\nBHP PLC, Antofagasta PLC and Anglo American PLC will focus on home-based companies. Unilever PLC and Intercontinental Hotels Group plc will also report on production numbers.\n\nAs the market anticipates the next round at central bank meetings, the macro releases of the week will be more important than ever.\n\n**Analysts at Deutsche Bank (NYSE DB)** said data releases at the beginning and end of each week “will set a tone”, with China’s GDP release and global flashPMIs for October.\n\nDeutsche explains that there are signs that the global recovery may slow down amid rising inflationary pressures. Investors will be closely watching China’s growth numbers to determine how China can support global growth.\n\n“But, the last quarter was more difficult for their economy. It’s been affected by power outages, concerns about Evergrande and other developers as well as Covid epidemics. Bloomberg predicts a slowdown of year-on-year growth of +5.0%.\n\n**The Bank of England** will have UK inflation data to** review mid-week**. Inflation data from the UK will also be available for Wednesday. Food availability, petrol prices and gas bills are all headline news across the country.\n\nAccording to the last update, August’s consumer price index rose 3.2% while the BoE preferred measure of CPIH (which includes housing costs) rose 3% year on year. This means that inflation has reached its highest level since January 2012.\n\nRecent weeks have seen Huw Pill, the BoE’s new chief economist, admit that inflation could rise higher than anticipated for longer than expected. However, colleagues on the Monetary Policy Committee differ on whether an increase in interest rates is necessary in the coming months.\n\nOver the next week, the US third-quarter earnings season picks up with 78 companies reporting to the S&P 500 and 58 from Stoxx 600.\n\nOn Tuesday, we will have reports from **Netflix Inc (NASDAQ;NFLX)**,** Johnson & Johnson, Procter & Gamble, (NYSE;PG)** and **Omnicom**.\n\nOn Wednesday, the releases will include those from **Tesla Inc, ASML, Verizon Communications** and **Abbott Laboratories (NYSE;ABT)** and **IBM. **\n\nThursday’s releases include those of **Intel**, **PayPal**,** AT&T**, **Southwest Airlines (NYSE;LUV), Honeywell (NYSE;HON)**, **Schlumberger**, and **Royal Caribbean.**\n\nResearch this year shows that Tesla is a popular share among US and UK investors. The update will be closely monitored on both sides.\n\nRecent updates showed that delivery numbers increased in the third quarter with 241,000 electric cars shipped.\n\nAnalysts at Hargreaves Lansdown said that there are “any further indicators that Tesla is managing well despite the semiconductor chip shortage which has knocked off other tech companies off their course”\n\nShe said that “as concerns mount about China’s slowing growth, a drop in consumer confidence could lead to more buyers purchasing lower-priced models than Tesla S and Model X cars.”\n\nWe will be seeking updates on the status of Gigafactories in Austin, Texas, and Berlin, Germany.\n\nNetflix’s speed gauge shows subscriber growth. This could have been increased by Squid Game, which is a new hot show all over the globe.\n\nThe video streaming giant added 1.5mln subs to its service in the last quarter. This was higher than anticipated but still lower than the 4mln net additions for the first quarter and the 10.2mln for the year.\n\nInvestors might also be interested in hearing about the company’s progress in video gaming and the Roald Dahl agreement, which was announced earlier this year.\n\nIn the coming week, mining giants **BHP PLC** and **Anglo American PLC (LSE :AAL),** will release third-quarter production reports and **Antofagasta PLC(LSE :ANTO).**\n\nRio Tinto’s lowered guidance for its huge Pilbara operations in Western Australia did not help the sector’s reporting season.\n\nRio mentioned the tight labour market in Western Australia. This won’t concern Anglo American as Antofagasta is focused on Chile and Africa, but maybe a concern to BHP.\n\nThe meteoric rise of mineral prices over the past months will give miners a warm glow.\n\nBellway is enjoying a strong coronavirus recovery tailwind. The trading update showed revenues of £3.1bn with a margin of about 17% and net cash at £330mln for fiscal year 2021.\n\nUBS anticipates a preex PBT of PS533mln, (reported £500mln after cladding provisions), and a preex EPS at 350p when it reports Tuesday.\n\nThe broker anticipates that volume will grow by 7.7%, average selling prices will be lower, and margins will improve to 18% in the current year. This results in a pre-expBT of £579mln.\n\nInflation and raw material availability are two areas that could be of concern. However, rival Barratt has already set the market for positive news with its bullish AGM statement. It will surprise if Bellway doesn’t share this optimism.\n\n**Barclays PLC (LSE :BARC),** shares have almost doubled in the past 12 months due to bad debt worries having eased, financial market booms and dividends returning.\n\nCredit Suisse believes that investors should be more positive about the bank’s future trading updates.\n\nThe bank’s analysts stated that clarity about costs and the earlier than expected share buyback had helped boost sentiment, while bad debt provisions moving downwards has been a positive.\n\n“Deal data is strong and points to market share gains, while asset quality remains high, though credit card revenues will likely not pick up before 2022.”\n\nA UK rate increase would be an added bonus to the positive vibes about UK banks right now, with Barclays’ net margin being flat at the moment but with so many things going it’s way, that would just be the icing on top.\n\n**Rentokil Initial PLC, LSE:RTO),** was able to recover (if you’ll pardon the pun) during the initial stages of the coronavirus outbreak. However, core pest control was compromised.\n\nThis was beginning to change with the company reporting that pest control had reported 8.5% growth in like-for-like sales in July, which is not too far from the 9% organic growth recorded by the hygiene division.\n\nLast month, the company hosted a capital markets day to provide City analysts with the inside scoop on its plans. The third-quarter trading update should not be surprising for the broking community.\n\nPeel Hunt was present at the analyst and investor event. He noted that the pandemic had profoundly affected attitudes towards hygiene and well-being, creating new and improved growth opportunities for the core Hygiene business. Rentokil will expand its offerings beyond the washroom (Premises hygiene £90mln revenues, Enhanced Environments £155mln revenues), and also expand the geographical footprint (20 new markets for 2020).\n\nThursday will be a busy day in big caps with Unilever PLC dropping a trading update as its shares drop by more than 20% since last year.\n\nAnalysts at AJ Bell believe this is partly due to the fact that investors are looking for cyclical businesses that can benefit from an economic recovery following a pandemic and have rapid earnings recoveries, such as oil, banks, and miners rather than ‘Steady Eddies like Unilever.\n\nLast year’s sales growth was slowing down, and this year, the FTSE 100 group is experiencing cost inflation as well as margin pressure.\n\n“The perception that Unilever has been slow in progress is fueling speculation that Unilever is ready for an activist investor to join its share register. Third Point’s Daniel Loeb prompted a shakeup at Nestle after Mark Schneider was appointed as its chief executive. Trian’s Nelson Peltz, who previously lobbied for changes at **Procter & Gamble’s (NYSE:PG),** had previously sat on the US firm’s board.” Analysts commented.\n\n“The auction of large parts of the company’s tea business could end such talkter, especially since a four-way fight between Advent, CVC and Carlyle, as well as a joint bid by Cinven and ADIA, may lead to the sale price being pushed up to PS4bn.”\n\nThe question is then what Unilever does to the money and whether it reinvests in areas that are more profitable, such as skincare, or returns some cash to shareholders. A shareholder could ask for a full-blown demergeration of the food operations or seek to extract value from Hindustan Unilever’s 62% stake, which trades on the Mumbai stock exchange in India.\n\nJP Morgan analysts expect Anglo-Dutch to raise concerns about margins. They see risks of volume turning negative, higher costs, and lower promotional spending reaching 2022 results.\n\n**AJ Bell PLC (LSE :AJB)** will provide a year-end trading report on Thursday. Hargreaves Lansdown, a larger competitor, provided a hint as to what might be coming with an update a week before.\n\nThe Bristol-based market leader reported lower revenue due to a levelling off of share trading volumes. However, net new business was won of £1.3bn and 23,000 clients were added.\n\nSalford-based AJ Bell stated in July that it had signed up 6% fewer users than the prior quarter. Net inflows of PS1.8bn also helped to lift total assets under administration 8% higher to PS70.4bn.\n\nThe quarter saw net inflows of £1.8 billion while total assets under administration increased by 8% to £70.4bn.\n\nAndy Bell, the chief executive, stated that the structural growth drivers in our sector are strong and that we are well-positioned to deliver more growth on our platform.\n\nThis week’s end is marked by Intercontinental **Hotels Group plc (LSE:IHG)**, releasing an update on its third quarter.\n\nAccording to the owner of the Holiday Inn and Crowne Plaza, there was a steady rise in domestic travel to the US and China in the first half 2021. Airlines also reported improving European trends in the summer. These positive trends could have continued into the third quarter.\n\nAnalysts at Hargreaves Lansdown stated that smaller hotel chains will likely have experienced lockdowns. This could potentially reduce supply. However, future revenues may be higher-margin due to cost savings and efficiency.\n\nThese could be record-breaking results due to increased demand, new openings of hotels and better margins. Market expectations are high with second-half revenues expected increase by 73.2% year on year to PS873mln.\n\n**Stock Market Announcements Expected**\n\n**Monday 18 October:**\n\nFinals: Tristel PLC (AIM:TSTL)\n\nTrading announcements: Schroders (LSE:SDR)\n\nAGMs: City of London Investment Group (AIM:CLIG), M&C Saatchi PLC (AIM:SAA), Novacyt SA\n\nEconomic data: US industrial production\n\n**Tuesday 19 October:**\n\nFinals: Bellway PLC (LSE:BWY), YouGov PLC\n\nInterims: B.P. Marsh & Partners PLC\n\nTrading announcements: 888 Holdings (LSE:888) PLC, BHP Group PLC (LSE:BHP), Centamin PLC (LSE:CEY), Netflix Inc (NASDAQ:NFLX)\n\nAGMs: McBride PLC (LSE:MCB)\n\nEconomic data: US building permits, housing starts\n\n**Wednesday 20 October:**\n\nTrading announcements: Advanced Medical Solutions Group (AIM:AMS) PLC, Antofagasta PLC (LSE:ANTO), Avast PLC (LSE:AVST), Segro (LSE:SGRO) PLC, Tesla Inc (NASDAQ:TSLA)\n\nAGMs: Real Good Food PLC (LSE:RGD)\n\nEconomic data: Retail Price Index (UK), Producer Price Index (UK), Consumer Price Index (UK)\n\n**Thursday 21 October:**\n\nFinals: Renishaw PLC (LSE:RSW), Volution PLC\n\nTrading announcements: AJ Bell PLC (LSE:AJB), Anglo American PLC (LSE:AAL), Barclays PLC (LSE:BARC), Dechra Pharmaceuticals PLC (LSE:DPH), PensionBee Group PLC (LSE:PBEE), Relx PLC, Rentokil Initial PLC (LSE:RTO), Spectris PLC (LSE:SXS), St. James’s Place PLC, Unilever PLC (LSE:ULVR), Vivo Energy PLC (LSE:VVO)\n\nAGMs: Alumasc Group PLC (AIM:ALU), Dechra Pharmaceuticals PLC (LSE:DPH), Renishaw PLC (LSE:RSW),\n\nEconomic data: UK public sector net borrowing\n\n**Friday 22 October:**\n\nFinals: Virgin Wines UK (AIM:VINO) PLC\n\nTrading announcements: Intercontinental Hotels, London Stock Exchange Group PLC (LSE:LSEG), Record PLC (LSE:REC)\n\nAGMs: Duke Royalty Ltd (AIM:DUKE), Fiske plc (AIM:FKE), Superdry PLC (LSE:SDRY)\n\nEconomic data: GFK Consumer Confidence, Retail Sales"}