The results of the US midterms will be on many minds come Wednesday morning, however an interest rate decision from the Federal Reserve will be holding just as much if not more attention.
On this side of the Atlantic, interim results and trading updates from several FTSE 100 and FTSE 250 firms, including Marks & Spencer and ITV, will provide plenty for investors to get their teeth into.
US FOMC meeting and interest rate decision
Aside from the election results, the Trans-Atlantic focus will be on the latest Federal Reserve policy meeting, with an interest rate decision due.
Following a series of US rate hikes already this year - and with some pointing the finger at these for causing the latest turbulence in global stocks markets - it is highly likely that the Fed policymakers will stay on hold for now, taking a wait and see approach.
Investors will, however, be seeking comment to assess whether the Fed’s policymakers believe that consumer price inflation and wage inflation is not set to run too ahead of itself and that their rate rises so far has not derailed the strong US economic growth.
That is the view that most investors would like to hear, if we get that then a hike at the December meeting could definitely be on.
M&S to come out of hiding
Meanwhile, on the high street, it has been a while since we last heard from Marks & Spencer.
The retailer decided to scrap the usual trading statement at its annual general meeting in July, so M&S has flown under the radar (or at least tried to) since reporting its full-year results in May.
In the year to the end of March, pre-tax profit slumped by 62% to £66.8mln as the company took a one-off charge of £321.1mln for its restructuring. As part of the turnaround plan, M&S wants to shift about a third of its sales online and reduce the floor space devoted to its struggling clothing and home division. It plans to close 100 UK stores by 2022.
Investors will be paying close attention to any update M&S provides on its reorganisation when it reports its first-half results.
“The May results were overshadowed by the news of a major restructuring which involves the closure of 100 stores so any news on progress with that, and the costs associated, will also be of interest to investors,” said Graham Spooner, investment research analyst at The Share Centre.
“Marks is belatedly making strides into online and digital retailing, including a new in-store payment app, and the market will be interested in what proportion of sales now come from those areas.”
Industry trends far from encouraging for ITV
UBS is not expecting great things from ITV plc’s (LON:ITV) third-quarter trading update.
The Swiss bank expects ITV to report third-quarter revenues of £670mln, little changed from last year, despite the Love Island-World Cup double-header at the start of the period.
It has predicted third-quarter advertising revenues will fall by 1% year-on-year, in contrast to the broadcaster’s guidance of flat advertising revenues.
UBS’s pessimism is prompted by “weak TV viewing trends in September (ITV Family viewing minutes down -8%) and a bearish tone from media buyers”. In general, it reckons industry trends for old-school broadcasters are far from encouraging.
Significant announcements expected:
Wednesday November 7:
Interims: Marks & Spencer Group PLC (LON:MKS), Dairy Crest PLC (LON:DCG), Sophos Group PLC (LON:SOPH), Wizz Air PLC (LON:WIZZ)
Trading updates: ITV plc (LON:ITV), Persimmon PLC (LON:PSN), G4S PLC (LON:GFS), JD Wetherspoon PLC (LON:JDW)
Economic data: US consumer credit numbers