The coming week sees a packed timetable on both sides of the Atlantic, with London’s agenda including updates from the likes of Ocado, Royal Mail and a host of miners, as well as unemployment and inflation numbers.
Across the pond, big tech names are coming to the fore including Netflix, Tesla, IBM, Intel, Snap, as well as Goldman Sachs (NYSE:GS), Johnson & Johnson (NYSE:JNJ), Harley-Davidson (NYSE:HOG), Philip Morris and American Express.
In the battle to be the next UK Prime Minister, voting among MPs will continue on Monday, with one candidate eliminated each day until two remain. The final two contenders will go toe-to-toe in trying to impress Conservative members over the summer, with the new Tory leader scheduled to be named on September 5.
Company announcements on Monday include an update from Tortilla Mexican Grill PLC (AIM:MEX), which floated last October and in April reported strong annual growth in sales and underlying profits.
It said the strong trading momentum had continued into its new financial year, with like-for-like growth of 20.1% in its first quarter, before the £2.75mln cash acquisition of Chilango, a rival Mexican food chain, was announced in May.
TUESDAY 19 JULY
Wages will be the main item under examination in the UK jobs report on Tuesday, as the cost of living crisis continues to squeeze households.
The most recent wages and unemployment numbers showed unemployment rising to 3.8% in April after falling to 3.7% in the three months to March, the lowest level since 1974.
Despite this tightness, average weekly earnings not including bonuses are rising only modestly, remaining unchanged at 4.2% in the three months to April, which is well below the headline inflation rate of 9.1%.
“On the face of it, next week’s data is unlikely to offer too much in the way of support for a 50bp rate hike in August,” said economists at ING, with the Bank of England’s monetary policy committee meeting less than three weeks away, on 4 August.
“Another notch higher in the unemployment rate and a slight uptick in inflation will come as little surprise to the committee, which only a few weeks ago resisted pressure to step up the pace of rate hikes, opting instead for another 25bp move.
“However, the potential for another 75bp rate hike from the Fed, mounting worries among Bank of England hawks about GBP weakness, and earlier explicit warnings about more aggressive hikes from officials, suggest the Bank may well be tempted to join the growing number of central banks that have opted for larger rate increases.”
Later on Tuesday it's the turn of Netflix Inc (NASDAQ:NFLX), whose share price has dropped 70% since the start of the year as it battles heavy subscriber losses and a decline in app downloads.
The streaming service is due to announce results for the second quarter on Tuesday and analysts question whether the streaming services powerhouse can deliver positive growth amid the ongoing impact of the cost-of-living crisis and a projected decline in subscriber numbers.
In April, it shocked the market by revealing it had lost 203,000 subscribers during the first quarter and expected to lose another 2mln more in the subsequent three months. (Read the full Netflix preview here.)
Among London-listed companies, the Tuesday selection includes flooring retailer Victoria PLC (AIM:VCP), which has made substantial progress in the year, with strong organic growth and a series of strategic acquisitions but has presumably been hit by concerns about consumer spending, with its shares down 60% so far this year.
EBITDA is expected to increase 16% to £156mln and PBT 30% to £65mln, according to Peel Hunt.
"Clearly there is concern over consumer spending; however, floor covering tends to be resilient in a tougher environment. The company has already stated that it expects to deliver sales of c.£1.5bn and EBITDA of over £200mln in the current year."
WEDNESDAY 20 JULY
UK inflation figures and updates from Royal Mail a group of miners and earnings from Tesla are the big themes for Wednesday.
A month ago the consumer price index rose to another record high of 9.1%, although core prices, which exclude fuel and food, slipped back to 5.9%.
Despite the slide in core prices, every other measure including retail and producer price inflation showed little sign of a slowing, with PPI input prices jumping above 20%, and increasing to a new record of 22.1%.
The long-running RPI measure rose to a 40-year high of 11.7%.
For June, the CPI headline number is expected to increase to 9.3% and then keep rising to “slightly above 11% in October”, according to the Bank of England, whose monetary policy committee pledged at its most recent meeting to act “forcefully” on inflation if necessary.
“This rather begs the question as to what level of inflation would justify a more forceful response when the US central bank is set to raise rates by another 150bps by September in response to a lower inflation problem,” said market analyst Michael Hewson at CMC Markets.
“A lot of the increase in headline CPI is now starting to manifest itself in higher gas, electricity prices, and petrol prices, which accounted for over 4% of the increase in May and looks set to continue in June.”
Investors are expecting to hear from Royal Mail PLC (LSE:RMG) that its Covid bounce is well and truly over.
So the stock market has decided anyway, with investors’ attention firmly back on its long-standing problems as industrial action affects the postal group again.
Labour costs are already rising, while fuel and power rises have led to a warning that stamp prices might have to rise again. (Read the full Royal Mail preview here.)
Later in the evening London time, Elon Musk’s electric vehicle powerhouse will report second-quarter earnings, which follow hot on the heels of a production and delivery update that saw volumes fell compared to the previous quarter for the first time in 10, though June was the highest production month in Tesla’s history.
Earnings are likely to be under pressure from new factories that are “gigantic money furnaces burning billions of dollars”, as Musk called them.
“The outlook for the second half of the year will be watched closely. Bringing new factories up to production levels that support profits is key, and it’ll be interesting to hear whether the group’s target of making 1.5m cars this year remains intact,” said Matt Britzman, equity analyst at Hargreaves Lansdown. (Read the full Tesla preview here.)
THURSDAY 21 JULY
A month ahead of its interim results this coming Thursday, Ocado Group PLC (LSE:OCDO) raised £578mln of new cash and said this amount will satisfy its needs for the “medium term”.
Management believes that, based purely on its existing contractual agreements, it can deliver annual underlying profit (EBITDA) above £750mln and be cash positive within the next five or six years.
Shares in the online grocery group are down around 60% since the start of the year, but are roughly flat since May. (Read the full Ocado preview here.)
Investors will also be looking ahead when kitchen retailer Howden Joinery reports interims, with the second half outlook being the main thing.
Guidance for pre-tax profit currently stands at £380mln, with the analyst consensus is slightly ahead of that.
“The concerns that we hear is that this target might be too punchy in the broader context of macro slowdown/weakness in appetite for high ticket purchases,” said UBS, which is also looking for some colour on pricing and volumes.
“Whilst Howden has delivered good results to date, investor concerns around tough comps and pull-forward of demand during the pandemic seem to weigh on the shares.”
FRIDAY 22 JULY
At the end of the week, following some worrying warnings elsewhere in the insurance sector this month, Beazley will report half-year numbers.
It has already indicated losses of US$50m arising from the war in Ukraine though that estimate didn’t include anything from aviation so an update on that will be a key focus in its latest update.
The Lloyds-based underwriter has also had problems in its cybersecurity division over the past three years, but said in its last release it had got a handle on these.
Peel Hunt said exposures have declined materially since 2020 (ransomware frequency down 25% per policy) and attritional claims now seem under control, with the broker adding it expected Beazley to continue to innovate in digital and online distribution and might even start to increase cyber exposure slowly again.
Beazley has guided that its combined ratio (underwriting premiums plus costs minus claims) this year will be around 90% ( the lower the better) and again this is something the City would presumably like to be reiterated.
Significant announcements in the week 18-22 July
Monday 18 July
Trading updates: Tortilla Mexican Grill PLC (AIM:MEX), Tristel PLC (AIM:TSTL)
Interims: Audioboom Group PLC (AIM:BOOM)
AGMs: Audioboom Group PLC (AIM:BOOM), Halma PLC (LSE:HLMA), JPMorgan European Discovery Trust PLC
Tuesday 19 July
Trading updates: Begbies Traynor (AIM:BEG) PLC, BHP Group Ltd (LSE:BHP, ASX:BHP), City of London Investment Group (AIM:CLIG) PLC, Integrafin Holdings PLC, Kier Group PLC (LSE:KIE), Luceco PLC (LSE:LUCE), Victoria PLC (AIM:VCP), Wise PLC (LSE:WISE), Yellow Cake
Interims: Photo-Me International PLC (AIM:PHTM)
AGMs: Arrow Exploration Corp (TSX-V:AXL, AIM:AXL, OTC:CSTPF), Begbies Traynor (AIM:BEG) Group, Clean Power Hydrogen PLC (AIM:CPH2), e-Therapeutics PLC, HICL Infrastructure PLC, Norcros PLC (LSE:NXR), TPXImpact Holdings PLC, Wynnstay Property PLC
Economic announcements: Unemployment report (UK), Building Permits (US), Housing Starts (US)
Wednesday 20 July
Trading updates: Antofagasta PLC (LSE:ANTO), Centamin PLC (LSE:CEY, TSX:CEE, OTC:CELTF), Costain PLC, Petropavlovsk PLC (LSE:POG), Premier Foods PLC, Royal Mail PLC (LSE:RMG)
AGMs: ADM Energy PLC (AIM:ADME, ETR:P4JC), Alkemy Capital Investment PLC, Biffa PLC (LSE:BIFF), Bloomsbury Publishing PLC (LSE:BMY), Deepverge PLC (AIM:DVRG), Experian (LSE:EXPN) PLC, Fidelity China Special Situations PLC (LSE:FCSS), Harbourvest Global Private Equity PLC, HICL Infrastructure PLC, Novacyt PLC, Paypoint (LSE:PAY) PLC, Plaza Centres NV, Premier Foods PLC, Proven Growth & Income VCT PLC, ProVen VCT PLC, Royal Mail PLC, Triad Group PLC, Urban Logistics REIT PLC (AIM:SHED)
Economic announcements: Inflation report (UK), MBA Mortgage Applications (US), Existing Home Sales (US), Crude Oil Inventories (US)
Thursday 21 July
Trading updates: 3i Group, AJ Bell PLC (LSE:AJB), Anglo American PLC (LSE:AAL), Brewin Dolphin Holdings Plc (LSE:BRW), Britvic, Close Brothers Group PLC (LSE:CBG), Dunelm Group PLC (LSE:DNLM), Frasers Group PLC (LSE:FRAS), Intermediate Capital Group (LSE:ICP) PLC, PensionBee Group PLC (LSE:PBEE), QinetiQ Group PLC (LSE:QQ.), SSE PLC (LSE:SSE)
Interims: Howden Joinery Group (LSE:HWDN) PLC, Ocado Group PLC (LSE:OCDO)
Finals: Fulham Shore PLC (AIM:FUL), IG Group PLC, Redcentric PLC (AIM:RCN)
AGMs: Abrdn Japan Investment Trust PLC, Big Yellow Group PLC (LSE:BYG), Edinburgh Investment Trust (LSE:EDIN) PLC, Evgen Pharma PLC (AIM:EVG), Fuller Smith & Turner PLC (AIM:FSTA), Intermediate Capital Group (LSE:ICP) PLC, Johnson Matthey PLC (LSE:JMAT), Octopus AIM VCT PLC, Pennon Group PLC (LSE:PNN, OTC:PEGRY), QinetiQ Group PLC (LSE:QQ.), Quantum Blockchain Technologies PLC (AIM:QBT), SSE PLC (LSE:SSE), Vp PLC, Weiss Korea Opportunity Fund Ltd, Workspace Group PLC (LSE:WKP), Zephyr Energy PLC
Ex-dividends to reduce the FTSE 100 by: 0.10 points (Avast)
Economic announcements: Flash PMIs (UK, US), Public Sector Net Borrowing (UK), ECB Interest Rate Decision (EU), Initial Jobless Claims (US), Continuing Claims (US), Philadelphia Fed Index (US)
Friday 22 July
Interims: Beazley, Moneysupermarket.com (LSE:MONY)
Finals: FRP Advisory Group PLC (AIM:FRP)
AGMs: DP Aircraft I Limited, Homeserve PLC (LSE:HSV), JD Sports Fashion PLC (LSE:JD.), Landore Resources Ltd (AIM:LND), Nanosynth Group PLC (AIM:NNN), President Energy PLC (AIM:PPC), TwentyFour Select Monthly Income Fund Limited, United Utilities Group PLC (LSE:UU.), Wandisco PLC (AIM:WAND)
Economic announcements: GFK Consumer Confidence (UK), Retail Sales (UK)
US earnings:
Monday: Bank of America, Goldman Sachs (NYSE:GS), IBM
Tuesday: Halliburton, Hasbro (NASDAQ:HAS), Johnson & Johnson (NYSE:JNJ), Netflix
Wednesday: Abbott Labs, Alcoa (NYSE:AA), Baker Hughes, CSX, Harley-Davidson (NYSE:HOG), Texas Instruments, United Airlines
Thursday: American Airlines, AT&T, Intel, Newmont, Philip Morris, Snap
Friday: American Express, Schlumberger, Verizon