Once the carnage of the New Year celebrations has been cleared, there will still not be very much on the market’s agenda in the coming week, although the two main events will be of utmost importance.
Given the crucial significance of the festive season for retailers, the first of a spate of trading updates from the high street will be key to show how the struggling sector is coping as consumer spending remains volatile according to recent surveys.
Clothing stores blue chip Next Plc (LON:NXT), as is traditional, will be first out of the blocks on Wednesday, with the story expected to be a familiar one as its high street shops struggle and Directory (its catalogue and online offering), picks up the slack.
The latest news that footfall on the high street for the Boxing Day sales was lacklustre won’t make pleasant reading for investors in Next and other retailers.
However, this update covers the weeks leading up to Christmas and there are some hopes that trading could have been better, especially given the more seasonal weather pattern.
However, Next’s last trading update wasn’t very encouraging as the group reported sales falling by 7.7% partly due to the pressures faced by the consumer and online competition and this will no doubt show up in the full year sales figures.
US jobs growth to stay strong
Away from domestic matters, the last US jobs report of 2017, which will be released on the first Friday of 2018, should continue to show payrolls across the Atlantic growing strongly.
In a preview of the data, economists at ING said that, following September’s hurricanes, it has been hard to draw many sensible conclusions from the past few US jobs reports.
But they think that December jobs growth looks set to edge back towards the underlying trend of 170,000, give or take, and they expect a slight tick-up in month-on-month growth, partly down to a quirk related to the number of working days in December.
The numbers could give the Federal Reserve further pause for thought, even after December’s 25 basis point US rate hike, particularly with a new broom taking over the central bank’s big chair from February.
Minutes from last month’s Federal Reserve Open Market Committee meeting will be published on Wednesday and traders will be looking for any hints at further rises in rates under the new boss, Jerome Powell.
Significant events expected w/e January 5:
Monday January 1
NEW YEAR’S DAY – London Markets closed
Tuesday January 2:
Economic data: UK manufacturing PMI;US manufacturing PMI
Wednesday January 3:
Trading update: Next Plc (LON:NXT)
AGM: Applied Graphene Materials PLC (LON:AGM)
Economic data: UK construction PMI; US construction spending; US FOMC Meeting minutes
Thursday January 4:
AGM: Cambria Automobiles PLC (LON:CAMB)
FTSE 100 ex-dividends: To clip 0.83 points off index - British Land PLC (LON:BLND), Experian PLC (LON:EXPN); Next Plc (LON:NXT)
Economic data: UK services PMI; UK mortgage approvals; US Chicago PMI
Friday January 5:
Economic data: BRC Shop Price index; US non-farm payolls; US unemployment rate