On a quiet day in the City of London's diary, with the big guns starting to report results later in the week, companies such as patient record software specialist EMIS Group plc (LON:EMIS) have their turn to shine.
A half-year trading statement on Tuesday is likely to see the firm holding up well during the pandemic, however, shareholders will be hoping the firm can operate easier going forward as pressure eases on the NHS.
There will also be interest in how the firm can capitalise on its recent product developments and the rollout of its EMIS-X platform.
Investors may also be keeping an eye out for any details on how the group plans to spend the £50mln it has in the bank.
Attention on US earnings and inflation
The market's attention will later turn to the start of US results season, with numbers from JPMorgan Chase and Goldman Sachs.
Market analyst Michael Hewson at CMC Markets said expectations have been tempered slightly by recent comments from JPMorgan CEO Jamie Dimon, who warned that this past quarter’s performance was unlikely to match that of the first.
“Trading revenue could well be lower than the consensus estimates of $6.5bn as lower yields and volatility impact turnover. Dimon also played down expectations over loan demand and income after a bumper Q1.”
With Q1 deposits for JPM rising 24% year on year to US$2.3trn, Hewson said having so much cash on its balance sheet is a nice problem to have but speaks to a difficult lending environment.
“It would appear that higher long-term rates are impacting on housing loan demand, a trend currently being reflected in the latest housing numbers, while small business lending was down 50% compared to the same quarter a year ago.
“This suggests that the banks' guidance could well be a significant driver of where we head next after the gains of the last couple of days.”
As regards inflation data he says, as bond markets are seemingly less concerned about inflationary pressures, after last week's sharp fall in yields, and commodity prices starting to show signs of slowing, today’s latest CPI numbers from the US “may well mark the high-water mark as far as the reflation trade is concerned“.
“This of course assumes that bond markets are drawing the correct conclusions around recent events, and that we weren’t merely seeing a clear out of stale positions."
As a reminder May producer prices jumped to 6.6%, its highest annual level in over 10 years. Expectations are for headline the consumer price index to remain steady at 5%, with core CPI, which excludes food and energy, expected to rise to 4%, from 3.8%.
Significant announcements for Tuesday July 13:
Trading announcements: EMIS Group plc (LON:EMIS), Kier Group PLC (LON:KIE), City of London Group PLC (LON:CIN), City of London Investment Group PLC (LON:CLIG)
Finals: Omega Diagnostics Group PLC (LON:ODX), Solid State PLC (LON:SOLI), Zoo Digital Group PLC (LON:ZOO)
Interims: Synectics PLC (LON:SNX)
Economic data: US inflation