All eyes will be on the US inflation figures on Wednesday, the important macro data of the week, as it will go a long way to settling or further upsetting market nerves about upcoming Federal Reserve interest rate moves.
Ahead of that in London results season will continue, with companies including Aviva, Prudential, Deliveroo and TUI in the diary, while in US earnings season, Disney is the big name announcing after markets close in New York.
CPI watch
With inflation at its highest level in more than 40 years, the Fed aggressively raising rates to combat inflation, hiking four times in 2022 to reach 2.25%.
A stronger than expected print for the US consumer prices index could rock stocks markets, while decline would deliver a boost, especially after a surprisingly good non-farm jobs report last Friday.
A month ago, figures for June showed CPI hit 9.1%, sparking concern that the Fed might be tempted to go for a bigger than expected 1% rate move at last month's policy meeting, though a 0.75 percentage point move was eventually seen as sufficient.
For July, the market expects CPI to fall to 8.8%, with core prices expected to rise from 5.9% to 6.1%.
If Wednesday’s CPI doesn’t reveal some slowing in prices, expectations will again rise for a big Fed rate hike in September.
Life insurers
Results from Aviva PLC (LSE:AV.) and Prudential PLC (LSE:PRU) come a day after rival Legal & General reported profits up 8%, in line with expectations, with its nterim up 5%.
Aviva should be a different story, however, with chief executive Amanda Blanc forced to contend with sexist heckles from shareholders at its London annual general meeting, so she may come out firing.
The firm has also faced pressure from Swedish activist investor Cevian Capital, which is pushing for cost reductions and higher cash returns, as well as union intervention in staff pay.
Analysts at UBS estimate growth in Aviva's operating profit will be stronger than the market expects.
As for Prudential PLC (LSE:PRU), more Asia-focused than its FTSE rivals, analysts predict a “dampening” in first-half business volumes, due to lockdowns in Asia, and will look to see if it secures a licence in Macau that could allow it to tap Hong Kong and China markets.
Investors are likely to be hanging on every word management will say about how Pru's business can withstand a macroeconomic downturn, especially in a scenario where rising costs of living could dampen new business sales.
Bicycle deliveries and cruise ships
In the tech sector and tapping into the gig economy, Deliveroo PLC results should prove interesting.
Shares are down over 50% since the start of the year, falling below 100p in May in the aftermath of Q1 numbers, some way from their IPO price of 390p back in April 2021.
Yet the company has continued to grow over the last 15 months, and in its full year numbers back in March, revenues rose 57% and losses increased to £298mln amid a decline in margins as market and overhead spend rocketed.
On guidance the company said it hoped to break even by 2024 on a full year basis and that on medium term gross transaction value (GTV) it expected to grow at circa 20% a year.
German leisure, travel and tourism company TUI is expected to release its third-quarter results on Wednesday August 10.
Dual listed in London and Frankfurt, the multifaceted company has its tentacles in the airline sector as well and the hotel sector, thus it faces some different challenges to the likes of InterContinental.
Flight disruptions and cancellations have generated a lot of bad press for TUI and its peers, while a new share placing in March to repay government loans went down poorly with existing shareholders.
On average, analysts expect underlying earnings (EBIT) of €43mln, though its not clear if this is before or after 'disruption costs', with a loss per share of US$0.04.
At UBS, analysts forecast third-quarter underlying earnings (EBIT) before disruption costs, of €75mln and forecast disruption costs in the quarter of around €75m, leading to a big fat zero.
"We expect the tour operator traffic in Q3 around 80-85% of 2019 levels, with a strong result in hotels and a sequential improvement in cruises."
Over at TUI AG (LSE:TUI), for its second quarter the Anglo-German tour and cruise operator reported average selling prices up 20% in its tours businesses, reflecting higher prices and a positive mix from longer stay durations.
UBS analysts believe TUI will be a beneficiary of its long-term contracts with suppliers in hotels, delaying the inflationary pressures, while it is able to increase prices for its tour operator packages and not see a full increase in accommodation costs until 2023.
"We expect investors’ interest also to be focused on TUI’s plans to further strengthen the balance sheet", they said, as well hearing what the timeline will be for the reduction in its credit facility from German state-owned bank KfW.
Disney lands
Across the Atlantic, Walt Disney Co (The Walt Disney Company (NYSE:DIS)) third-quarter earnings will be the main event, with visitors flocking to its theme parks and recent data showing its streaming service was outshining rivals Netflix and Amazon Prime.
Disney+ captured 7.9m new subscribers, but with Netflix losing 1mln subscribers in their recent results, it will be instructive to see how this translates to the House of Mouse.
“Investors will be eager to see if Disney has gathered more momentum in the third quarter despite high inflation impacting consumers purchasing power,” said Charlie Williams, equity research assistant at Hargreaves Lansdown, adding that attention will also be focused on how well these parks have fared internationally.
Operating losses in Disney’s direct-to-consumer arm ballooned three times to US$887mln last quarter, reflecting the cost of producing popular content, so any guidance on when profits may arrive here will be welcomed.
Significant announcements on Wednesday 10 August
Interims: 4imprint Group Plc (AQSE:FOUR), Admiral Group Plc (LSE:ADM), Aviva PLC (LSE:AV.), Atalaya Mining (AIM:ATYM, TSX:AYM) PLC, Arix Bioscience PLC (LSE:ARIX), CLS Holdings Plc (LSE:CLI), ContourGlobal PLC (LSE:GLO), Gamesys Group PLC (LSE:GYS), Genuit Group PLC (LSE:GEN), Hostelword Group PLC, Prudential PLC, Quilter PLC (LSE:QLT), TP Icap Group PLC, TUI AG (LSE:TUI) PLC
AGMs: Ariana Resources PLC (AIM:AAU), Cadence Minerals PLC (AIM:KDNC), CML Microsystems Plc (LSE:CML), Foresight Group Holdings Ltd, Investec PLC (LSE:INVP), Mountview Estates PLC, Northern 2 VCT PLC
Economic announcements: MBA Mortgage Applications (US), Consumer Price Index (US), Wholesales Inventories (US), Crude Oil Inventories (US)
US earnings: Walt Disney, The Trade Desk