Retailers will remain the main corporate focus on Thursday as, in the wake of results already this week from the likes of Marks & Spencer Group PLC (LON:MKS) and Primark owner Associated British Foods PLC (LON:ABF), supermarket giant J Sainsbury PLC (LON:SBRY) will issue its latest half-year numbers, while fashion firm Superdry PLC (LON:SDRY) and bikes to car parts retailer Halfords PLC (LON:HFDS) will also provide market updates.
Recently monthly grocery market data has shown that Sainsbury's has got its act together after the curtain fell prematurely on showtune-singing boss Mike Coupe’s attempt to merge with Wal-Mart Inc (NYSE:WMT) owned Asda earlier in the year.
In the 12 weeks to mid-October, for example, Sainsbury's was the only supermarket of the “big four” to achieve sales growth, confirming its improving status after the shabby performances last year.
Ahead of the upcoming numbers, Sainsbury’s said its first-half underlying profit was likely to be £50mln lower than last year, with like-for-sales down 0.2% in the second quarter having dropped 1.6% in the first quarter.
Noting that the sales performance was better than its competitors, Coupe also looked to get investors back on side with plans to slash costs by closing weaker stores.
Sainsbury's shares have essentially gone sideways for the past six months, with its strategic review - including slashing £500mln over the next five years, refurbishing tens of thousands of stores and raising £270mln-£350mln developing surplus land - not seeming to inspire.
Investors want to know whether Coupe will try and pull another rabbit out of the hat or stick to his knitting?
Turmoil ongoing at Superdry
Troubled fashion brand Superdry PLC (LON:SDRY) is publishing its half-year pre-close statement after a phase of management turmoil. It was announced earlier this month that returning co-founder Julian Dunkerton would remain as the firm's chief executive until April 2021.
Having walked away from the board in 2018, Dunkerton forced his way back earlier this year, even though senior board members warned his return would be “extremely damaging”, following a 65% share price plunge over 12 months.
Analysts reckon this “clean-up” period of addressing strategic mishaps will see underlying profit before tax losing £7mln, as well as a 6% fall in revenue due to a greater focus on full-price sales, less discounting and legacy product that the new team cannot influence.
The faux-Japanese brand, started from a market stall in Cheltenham, is expected to recover from the second half onwards, so comments on current trading will be scrutinised.
Persimmon profits not in season
Away from retail, housebuilder Persimmon PLC (LON:PSN) will also post a trading update, with investors watching closely for changes in trends regarding sales rates, house prices or cost inflation that the big cap has already been reporting on.
One of Persimmon's biggest issues is the shift towards build quality and customer service, with the group having registered some improvement in the past quarter although it still remains a while away from its peers.
Uncertainty is a killer for the housing market, according to analysts, and they expect further bumps over the next months as UK politics navigates through a general election and the further Brexit developments.
The forecasts are for Persimmon to report a 5% drop in sites volume as 2019 guidance, with operating margins declining to 30.5% in the second half.
Bank of England getting itchy trigger fingers?
With the general election inked in for December, the Bank of England is almost certain to sit on its hands after its latest policy meeting, with an interest rate decision due at midday on Thursday.
This is despite the hints from the BoE governor Mark Carney and his colleagues of their desire to push through further interest rate increases.
Hikes would make sense, given low levels of UK unemployment and wage growth that is outstripping inflation, said Russ Mould at AJ Bell, but the MPC is also mindful of Brexit-related uncertainty, which is a big reason for not increasing the headline cost of borrowing.
“Throw in interest rate cuts from central banks on Europe and America, to name but two, and it’s pretty hard to see the BoE raising rates and a lot easier to see it shifting stance toward making a case for cuts,” Mould commented in a preview note.
The monetary policy committee should vote unanimously once again to keep the UK interest rate at 0.75%, economists reckon.
Looking further forward, Citigroup, which sees the doves among the BoE policymakers pointing to weak economic confidence and hawks gesturing to solid wage growth, said a decisive election result before Christmas could bring rate hikes.
“If voters decisively back the Conservatives’ Brexit deal or a ‘Remain alliance’ and second EU referendum, and the winners execute their fiscal easing plans, rate hikes could follow (global economy permitting). If not, a rate cut becomes more likely,” the Citi economists said.
Significant events expected on Thursday 7 November
Interims: J Sainsbury PLC (LON:SBRY), Halfords Group PLC (LON:HFD), Tate & Lyle PLC (LON:TATE), Auto Trader Group plc (LON:AUTO), Great Eastern Energy Corporation Ltd (LON:GEEC), JZ Capital Partners Ltd (LON:JZCP), Renewi PLC (LON:RFD), System1 Group PLC (LON:SYS1), 3I Infrastructure PLC (LON:3IN)
Trading statements: Persimmon PLC (LON:PSN), Superdry PLC (LON:SDRY), Flutter Entertainment PLC (LON:FLTR), RSA Insurance Group PLC (LON:RSA), G4S PLC (LON:GFS), Hikma Pharmaceuticals Plc (LON:HIK), Howden Joinery Group PLC (LON:HWDN), IMI PLC (LON:IMI), Inchcape PLC (LON:INCH), Inmarsat Plc (LON:ISAT), Lancashire Holdings Ltd (LON:LRE), McCarthy & Stone PLC (LON:MCS), Provident Financial PLC (LON:PFG), Purplebricks Group PLC (LON:PURP), TI Fluid Systems PLC (LON:TIFS), Bank Of Georgia Group PLC (LON:BGEO), Derwent London PLC (LON:DLN)
AGM: Supermarket Income REIT (LON:SUPR)
Economic announcements: Bank of England rate decision, US weekly jobless claims, US consumer credit
Ex-dividends to knock 6.5 points off FTSE 100 index: BP PLC (LON:BP), Whitbread plc (LON:WTB)