In the coming week, many investors will no doubt be looking forward to the long Easter weekend but will have plenty to keep them going until then, including some big company results and key wage and inflation data that may determine the Bank of England’s next policy moves.
Retail will be a theme in UK company news, with results from Tesco, JD Sports, ASOS and THG, while elsewhere updates from Deliveroo and easyJet.
US earnings season also begins in earnest, with banks JP Morgan, Morgan Stanley (NYSE:MS), Goldman Sachs (NYSE:GS) and Citigroup kicking off what could be a more turbulent few weeks if issues geopolitical, inflationary and supply chain-related have anything to do with it.
For the US reporting season, the consensus Wall Street forecast is for earnings per share across the S&P 500 in the first quarter to decelerate to 5% year-on-year and margins to contract to 11.8% from 12.3%, although excluding the energy sector EPS growth is seen as flat but with margins compressing much more. Goldman Sachs (NYSE:GS) said it expects negative revisions to EPS estimates for the remaining quarters of the year.
There a several important economic updates for the UK this week, with the Office for National Statistics kicking things off on Monday with monthly UK gross domestic product (GDP) figures that are expected to soften materially after a strong January.
GDP bounced back with 0.8% growth in the first month of the year after falling 0.2% in December when the Omicron variant had a significant impact.
The Bank of England last month revised up its growth forecasts for the first quarter as a whole to 0.75% from a flat prediction a month earlier, while the Office for Budget Responsibility downgraded its expectations for the whole of 2022 to 3.8% from 6%.
TUESDAY 12 APRIL
Flight cancellations in the run-up to Easter are not what an airline needs ahead of its half-year numbers.
But that has been the story for easyJet PLC over the past two weeks.
As PR goes, spring 2022 has been a shocker for the airline and airport industry but whether it will impact on the next leg of recovery from the Covid pandemic remains to be seen.
Analysts at Citigroup expect second quarter revenue of £724mln, which is above the City consensus and reflects easyJet increasing market share in high yielding routes such as France and Portugal.
Elsewhere, a first-quarter trading update for Deliveroo PLC (LSE:ROO) will reveal whether the strong end to 2021 continued into 2022.
The food delivery group boasted of continued market share gains in the UK in the fourth quarter of 2021. The first month of this year will see the company going up against tough comparatives from a year ago when some lockdown restrictions were still in place in the UK.
Wage inflation and the unknown consequences of the Ukraine conflict represent other challenges for Deliveroo and for most other companies, including retailers, which have been battling recently to outdo each other in their pay rises in order to keep staff.
Fashion retailer JD Sports Fashion PLC (LSE:JD.) is set to report finals on Tuesday, having been recently tipped to ride out the uncertainty by RBC Capital Markets.
The analysts argued JD's strong relationship with brands such as Nike position it well for future growth as well as being able to withstand challenging macro backdrops.
Although JD upped its guidance late last year, adding it was coping well with global supply chain issues, is had been made to sell Footasylum by the Competition and Markets Authority.
RBC sees profit before tax coming in above £900mln, which could help reassure investors who have deserted the company in 2022, with the shares down 32% to 145.8p so far.
Fellow fashion retailer ASOS PLC (AIM:ASC) has also seen its shares tumble this year, down 31%, with Russia weighing on sentiment.
Last month the e-tailer said it had immediately suspended sales in Ukraine after the invasion and later decided to suspend sales to Russia, with the two countries combining to represent circa 4% of group revenue and roughly £20m to profits.
Half-year results on Tuesday will be its first since making the move from AIM up to London’s main market where it should be big enough for promotion to the FTSE 250.
Wage growth may be the key item in Tuesday's February labour market report from the ONS after last months' report surprised on two fronts, with unemployment dropping by more than expected and wages coming in slightly stronger.
Deutsche Bank forecasts unemployment will inch down to 3.8%, while regular pay will rise to 4%, backed by weaker supply, rising temp placements, and strengthening recruitment difficulties.
"One other element of the labour market report we will be carefully watching is how labour supply tracks in February. Survey data on labour force availability have been generally weak – if not weakening."
This comes a day ahead of UK inflation data, as does US inflation data later in the day, which traders will be watching like hawks as the Fed's last meeting minutes showed that: “Many participants noted that one or more 50 basis point increases in the target range could be appropriate at future meetings, particularly if inflation pressures remained elevated or intensified”.
WEDNESDAY 13 APRIL
The rising cost of living is on everyone's minds and so Wednesday brings the most important news of the week, which the Bank of England will be keenly watching, as we are likely to get confirmation that UK inflation has risen to its highest level for 30 years.
The Office for National Statistics will reveal the consumer price index (CPI) for March at 9.30am, along with other measures of inflation.
CPI rose by 6.2% in the year ended February 2022, up from 5.5% in January.
“We expect March's consumer prices report… to show that CPI inflation leapt to 6.7% – its highest rate since March 1992,” Pantheon Macroeconomics said, which would be well above the "around 6%" range predicted by the Bank of England’s monetary policy committee.
The MPC will indeed be keenly watching, said Deutsche Bank, which is also expecting 6.7%.
“We expect a lot of the jump in prices to come from energy and food – both baskets impacted by the Russia-Ukraine war. We anticipate strong core goods and services prices too – though we think this will likely take a backseat to the non-core components.”
Prices will be further examined at Tesco PLC (LSE:TSCO), as the UK’s biggest grocer reveals its annual results.
It’s the biggest company news in the diary for the week, with a profit warning from rival Morrison’s last week adding to the nervousness surrounding consumer spending, food inflation, spiralling wage costs and squeezed household incomes.
No such trading problems are expected from Tesco and indeed Morrison’s problems might just be down to its rivals, say analysts.
Forecasts are for Tesco to reveal underlying operating profits of £2.8bn (£1.8bn) with guidance towards a flat year ahead.
Shareholders should be rewarded with a dividend of 10.9p, up 19% while UBS expects more share buybacks to be announced.
Russia-based gold miner Petropavlovsk PLC (LSE:POG), as it was one of the most popular companies for private investors in the past month, is therefore likely to get more than the usual amount of interest in its results.
Following the invasion of Ukraine, and the sanctions imposed on its bank and principal offtaker, Gazprombank, the company said this meant it effectively couldn't sell any gold.
Restrictions on the purchase and sale of gold in Russia “may complicate the search for an alternative purchaser,” Petropavlovsk said in a statement.
On Wednesday it’s the first big name in US earnings season, with JP Morgan Chase starting proceedings, before Morgan Stanley (NYSE:MS), Goldman Sachs Group (NYSE:GS), Citigroup Inc and Wells Fargo report a day later.
For the US reporting season, the consensus Wall Street forecast is for earnings per share across the S&P 500 in the first quarter to decelerate to 5% year-on-year and margins to contract to 11.8% from 12.3%, although excluding the energy sector EPS growth is seen as flat but with margins compressing much more.
Goldman analysts expect many companies to make negative revisions to EPS estimates for the remaining quarters of the year.
And at Saxobank they said JPMorgan's earnings "will set the tone for the earnings season as the US bank is the biggest bank in the developed world".
THURSDAY
THG PLC (LSE:THG), better known to the person in the street as The Hut Group, releases full-year results that should also include an update on first-quarter trading.
The company certainly has some reputational damage to repair with the City impatient for the online retail platform to unlock the supposed power of its technology.
The beleaguered group recently appointed ex-ITV head Charles Allen as its new chairman and has generally made a raft of other improvements to the group’s corporate governance structures over the last year in an attempt to placate investors.
Allen’s task is to develop the management team and refine the group’s strategy but it is probably too soon to expect any big announcement on strategy.
Later, US banks Morgan Stanley (NYSE:MS), Goldman Sachs (NYSE:GS), Citigroup and Wells Fargo will report first-quarter earnings, which could well set the tone for some of the London-listed banks too, most likely those with significant investment banking arms - Barclays PLC (LSE:BARC), Standard Chartered PLC (LSE:STAN) and NatWest Group PLC (LSE:NWG).
Analyst Peter Garnry at Saxo Markets said Wells Fargo and Citigroup are "key to watch due to their consumer and commercial banking exposure, while earnings from Morgan Stanley (NYSE:MS) and Goldman Sachs (NYSE:GS) are typically not moving markets or sentiment".
The US financials have had a tough time lately despite rising interest rates, said Garnry, "the flattening of the US yield curve has not helped", underperforming the S&P 500 by 8.1% since mid February and back to the lows from late December.
Significant announcements in the week 11-15 April
Monday 11 April
Finals: Tortilla Mexican Grill PLC (AIM:MEX),
Trading announcements: Audioboom Group PLC (AIM:BOOM), Sirius Real Estate Limited (LSE:SRE, JSE:SRE, OTC:SRRLF)
Economic data: Gross Domestic Product (UK), Index of Services (UK), Industrial Production (UK), Manufacturing Production (UK), Balance of Trade (UK),
Tuesday 12 April
Finals: JD Sports Fashion PLC (LSE:JD.), Microlise Group PLC (AIM:SAAS), Northbridge Industrial Services Plc (AIM:NBI)
Interims: Nanocco Group PLC, ASOS PLC (AIM:ASC), LVMH PLC
Trading announcements: easyJet PLC, Pennon Group PLC (LSE:PNN, OTC:PEGRY), Deliveroo PLC (LSE:ROO), Ferrexpo PLC (LSE:FXPO), Lion Trust Asset Management PLC, Moneysupermarket.com (LSE:MONY) Group PLC
AGMs: Phoenix Copper Ltd (AIM:PXC, OTCQX:PXCLF)
Economic data: Unemployment Rate (UK), Retail sales (UK), Claimant Count Rate (UK), Consumer Price Index (US)
Wednesday 13 April
Finals: Lookers PLC (LSE:LOOK), Petropavlovsk PLC (LSE:POG), Tesco PLC (LSE:TSCO)
Trading announcements: PageGroup PLC (LSE:PAGE)
AGMs: AssetCo PLC (AIM:ASTO), Smith and Nephew PLC
Economic data: Consumer Price Index (UK), Producer Price Index (UK), Retail Price Index (UK), MBA Mortgage Applications (US), Producer Price Index (US), Crude Oil Inventories (US),
Thursday 14 April
Finals: THG PLC (LSE:THG)
Trading announcements: Ashmore Group (LSE:ASHM) PLC, Dunelm Group PLC (LSE:DNLM), Hays PLC (LSE:HAS), Norcros PLC (LSE:NXR), Mediclinic International Plc (LSE:MDC)
AGMs: AIQ Ltd (LSE:AIQ), Angus Energy PLC (AIM:ANGS), XP Power Limited
Economic data: Business Inventories (US), Continuing Claims (US), Import and Export Price Indices (US), Initial Jobless Claims (US), Retail Sales (US)
FTSE 350 ex-dividend stocks: Greggs PLC (LSE:GRG), Ibstock PLC (LSE:IBST), ITV PLC (LSE:ITV), Unite Group PLC (LSE:UTG), Vesuvius Plc (LSE:VSVS)
Other ex-divs: Alpha FX Group PLC (AIM:AFX), Belvoir Group PLC (AIM:BLV), CPP Group (LSE:CPP) PLC, Genel Energy PLC (LSE:GENL, OTC:GEGYY), JP Morgan US Smaller Companies Investment Trust PLC, Old Mutual Limited (LSE:OMU), Photo-Me International PLC (AIM:PHTM), STV Group Plc (LSE:STVG), BMO Commercial Property Trust Ltd, Caledonia Mining Corporation PLC (AIM:CMCL, NYSE-A:CMCL), Edge Performance VCT PLC, I3 Energy PLC, Manchester & London Investment Trust plc (LSE:MNL), BlackRock Latin American Investment Trust PLC, JPMorgan Asia Growth and Income PLC, JPMorgan Japan Small Cap Growth & Income Trust, Scottish Investment Trust PLC
Friday 15 April
Bank holiday (UK)