Despite it being the last week of August, and the end of summer holidays looming, there is still plenty of financial news to satisfy hungry investors.
A few big economic data dumps will keep traders busy, while the UK energy price rise that many have been anticipating for months will conclude the week.
MONDAY 22 AUGUST
Other than any unexpected events over the weekend, Monday will include conveyancer Smoove who recently extended a contract with Lloyds Banking.
Base Resources Limited (AIM/BSE, ASX/BSE) has to report its full-year results. The company announced last month that revenues had reached another quarterly record thanks to the sharp rise in prices for all three of their mineral sands metallics over the past year.
Important announcements made Monday
Finals Base Resources Ltd, Smoove PCL
AGMs: Argentex Group PLC (AIM:AGFX), Ondo InsurTech PLC (LSE:ONDO), Trackwise Designs PLC (AIM:TWD)
US earnings Palo Alto Networks and Zoom Video Communications
TUESDAY 23 AUGUST
Wood Group PLC is Tuesday’s largest fish on the City Menu.
Although the FTSE 250-listed company has attempted to reinvent itself through green credentials, its fortunes remain tied to the oil and natural gas cycle.
The latest update showed a lower underlying profit in the first half of this year, but a stronger performance during the second half. This was due to a better performance in Turbines joint ventures as well as stronger revenue growth in Projects.
Analysts and investors will be eager to hear new ideas from Ken Gilmartin (new chief executive), who began his tenure last month.
Earnings from further afield include one Tesla’s Chinese competitors, XPeng Inc; Sage Group’s US rival Intuit; department store chain Nordstrom, and clothing retailer Urban Outfitters.
On Tuesday, the first major macroeconomic data will be released. These surveys will include ‘flash’ purchasing manager index surveys for the UK and US manufacturing sectors. A composite reading can also be published that may raise concerns about later official data.
The composite PMIs for the US and Eurozone fell below 50 a month ago, which indicates contraction territory.
The UK services PMI was 52.6 in July. However, it is expected to fall to 52.0 in August. In addition, the manufacturing PMI will see a softening, from 52.1 in July and 51.2 in August.
This would result in a composite PMI around 51.0. Anything above 50 means that the economy is still expanding.
However, Capital Economics economist Ruth Gregory believes that the composite PMI will fall below 50 in August. This would mark the first time since COVID-19 Lockdown.
This is in line with the economic forecasting team’s prediction that the economy will slide into recession this quarter.
Gregory stated that July activity was supported by spending on leisure and travel services, but that the squeeze on household real earnings from rising inflation will likely mean that this resilience will be short-lived.
She said that she was not surprised by the PMI balances, which could indicate further signs of easing in pipeline price pressures.
“Even so the recent rise in wholesale gas prices will soon translate into higher energy costs to businesses and the current tightness of the labour market mean we think wage pressures won’t change much. We believe that the prices balances will likely remain at historic high levels for quite some time.
Market analyst Marshall Gittler from BDSwiss said that the US PMIs would also be closely monitored after last week’s devastating Empire State manufacturing survey. This “sent recessionjitters down market’s collective back”, but the Philadelphia Fed’s version surprised on the upside.
Important announcements made Tuesday
Interims: Aferian PLC (AIM:AFRN), RM Plc (LSE:RM. ), John Wood Group PLC
AGM: African Pioneer PLC(LSE:AFP), Bezant Resources PLC [AIM:BZT], Edge Performance VTC PLC Kendrick Resources PLC LSE:KEN], Livermore Investments Group Ltd. Xtract Resources PLC PLC LSE:XTR
Economic announcements Flash PMIs (UK and US), New Homes Sales US
US/China earnings – Intuit.com, JD.com. Medtronic. Nordstrom. Urban Outfitters. XPeng
WEDNESDAY, 24 AUGUST
Although there is a midweek lull for London-listed results reports, construction group Costain PLC says it is not expected to surprise.
Recent trading updates showed revenues slightly higher than expected due to recovering mechanisms in contracts and rising volumes across both divisions.
Operating profit was stable, reflecting operational progress, management of inflation and broker Peel Hunt noting that supply chain pressures were well-managed.
The broker also said that there was no mention of legacy or contract issues. This would be reassuring considering the company’s uncertain history.
Peel Hunt’s full-year average cash flow increased from PS90mln, due to its strong cash performance.
As is often the case, there might be more drama from the stateside. Chipmaker NVIDIA Corporation (NASDAQ:NVDA) released its second quarter earnings on Wednesday. However, it already indicated that the quarterly revenue would fall US$1.4bn below the US$8.1bn guide, due to lower sales of gaming chips.
Expectedly, profit margins will be lower due to a reduction in excess inventory. Wall Street will also be paying attention to cost control.
It warned last time about “ongoing macroeconomic uncertainty”, and this is expected to continue, with lower hardware spending, which will impact demand for chips.
We have some important announcements for Wednesday
Interims Anglo Pacific Group PLC, (LSE:APF), Costain PLC
AGMs Creightons PLC, Lamprell PLC (LSE :LAM)
Economic announcements: MBA Mortgage Applications (US), Durable Goods Orders, Pending Homes Sales (US), Crude Oil Inventories.
US earnings Nvidia. RBC. Salesforce. Snowflake. Williams Sonoma. Victoria’s Secret.
THURSDAY, 25 AUGUST
The shares in CHR PLC (LSE:CRH), the Dublin-based and US-focused supplier of construction materials, rose strongly during the pandemic. This was partly due to expectations that President Biden’s infrastructure bill will lead to strong demand.
It released a positive update for April’s first quarter, saying that sales, cash profits, and margins were all expected to be better than the previous year. However, along with Thursday’s half-year results, the FTSE 100-listed group will provide guidance for a slower performance in the second half.
After sector peers Wood Group earlier this week, it’s now the turn of Hunting, an energy services provider.
Its shares have been in decline for many years. It’s difficult to imagine that any changes made with these interims, such as the July bullish trading update, would have much impact.
After the announcement of a possible arrangement to limit customer compensation liabilities for mislaid unaffordable loans, Morses Club PLC will report its full-year results.
Results may be more favourable in the medium- to long-term because there are fewer competitors and consumers who want quick cash from financially troubled households.
Later in the day, macro-minded investors will focus on US GDP and the Jackson Hole economic symposium for central bankers. After the closing bell in New York, earnings from Peloton Interactive (NASDAQ:PTON), will be the focus of New York’s financial markets. A recent memo stated that 800 jobs will be lost as a result of the closure of North American warehouses.
Important announcements Thursday
Trading update: Benchmark Holdings PLC (AIM:BMK) Finals: Hays PLC (LSE:HAS), Morses Club PLC
Interims: Anglo Pacific Group PLC, Benchmark Holdings PLC. CRH PLC. Faron Pharmaceuticals Oy (AIM :FARN, OTC :FPHAF), Grafton Group PLC. Harbour Energy PLC. (LSE:HBR) Hunting PLC. MacFarlane Group PLC. PureTech Health (LSE :PRTC. NASDAQ:PRTC. OTC :PTCHF.)
AGM: Nuformix PLC [LSE:NFX] , Triple Point Energy Efficiency Infra Company PLC
Ex-divs to lower the FTSE 100 at 6.61 points
Economic announcements Car production (UK), Continuing Claims(US), GDP Preliminary(US), Initial Jobless Claims(US)
Earnings from the US and China: Coty. Dollar Tree. Dollar General. Peloton. Pinduoduo. VMware. Workday.
FRIDAY 26 AUGUST
The UK’s biggest bad news will be Friday’s rise in energy bills prices. This is something everyone knows but can do little about.
Regulator Ofgem expects to raise the annual price cap above £3,500 from the £1,971 cap introduced at the last seasonal review last April and £1,277 last Oct.
Make no mistake, this is a fossil fuel crisis. Next Friday, Aug 26th #Ofgem announces cap level. We don't yet know what the October price cap will be, but it's likely to be around £3,500 for a typical home. This is 80% higher than the same time last year https://t.co/PhmQEfhGxb
— Share_Talk ™ (@Share_Talk) August 19, 2022
Analysts predict that energy will rise further at the January revision when reviews shift to quarterly instead of seasonal.
The London diary appears empty in company news. However, there are big companies announcing results from China and the US which could impact the FTSE.
Meituan is China’s online food delivery company and the sixth largest holding in the FTSE 100-listed Scottish Mortgage Investment Trust PLC, (LSE:SMT)
The company’s earnings came just days after its shares plunged 10% due to reports that Tencent, another tech giant and SMT holding, was selling off most or all of its US$24bn stake.
It’s now the US that Dell Inc reports record revenues and profits in the first quarter of 2022, as it continues to cash in on growing demand for technology to support hybrid work.
Since the outbreak of the pandemic, the shares have risen by more than 250%.
The Friday focus will be on US inflation, which will take the form of personal consumption expenditure (PCE), deflators that are attached to personal income and spending numbers.
Personal income will increase by 0.6% and personal spending by 0.5% respectively, which is about the average for recent months.
The Federal Reserve’s favourite measures of inflation are the deflators. They are used every quarter when officials prepare their economic forecasts.
Month-on-month growth is expected to drop sharply to 0.1% from 1.0% in the headline figure. Core deflator will fall to 0.3% from 0.6% month prior.
Important announcements Friday
Economic announcements Personal Consumption Expenditure, Personal Income (US), Personal Spending (US), U. of Michigan Confidence(US), Trade Balance.
Earnings in China and the US: Dell, Marvell and Meituan
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