While it’s the last full week of August and the end of the summer holidays looms, there’s still enough financial news out there to feed hungry investors, including results from CRH, Hays, Nvidia, Wood Group and Zoom.
There will be a handful of big economic data dumps to keep traders on their toes too, while the week finishes with the UK energy price hike that many have been dreading for months.
MONDAY 22 AUGUST
Excepting any surprises over the weekend, Monday's small smattering is scheduled to include conveyancer Smoove, which recently announced an extension of a contract with Lloyds Banking.
Full-year results are also due at Base Resources Limited (AIM:BSE, ASX:BSE), which last month announced that revenues hit another quarterly record, helped by prices of all three of its mineral sands metals jumping sharply over past year.
Significant announcements on Monday
Finals: Base Resources Ltd, Smoove PLC
AGMs: Argentex Group PLC (AIM:AGFX), Ondo InsurTech PLC (LSE:ONDO), Trackwise Designs PLC (AIM:TWD)
US earnings: Palo Alto Networks, Zoom Video Communications
TUESDAY 23 AUGUST
Wood Group (John) PLC is the biggest fish on the City menu for Tuesday.
The FTSE 250-listed group has been trying to reinvent itself by buffering up its green credentials but like its fossil fuel customers its fortunes are still seemingly tied to the oil and gas cycle.
Its latest update guided to lower underlying profit for the first half of the year but a stronger performance in the second half, helped by an improved performance in Turbines joint ventures and stronger revenue growth in the Projects arm
Investors and analysts will be keen to hear any new ideas from new chief executive Ken Gilmartin, who started last month.
Earnings from further afield include one of Tesla’s Chinese rivals, XPeng Inc; Sage Group’s US rival Intuit, department store chain Nordstrom and clothing retailer Urban Outfitters.
In the first big macroeconomic data of the week on Tuesday there will be ‘flash’ purchasing managers’ index surveys released for the services and manufacturing sectors for the UK US and other major economies, along with a composite reading that can sometimes raise an early red flag for later official data.
A month ago, the US and eurozone composite PMIs slipped below the 50 mark, which indicating contraction territory.
For July, the UK services PMI came in at 52.6 but is expected to weaken to 52.0 for August, with the manufacturing PMI also seen softening from 52.1 in July to 51.2.
This would give a composite PMI of around 51.0, which being above 50 indicates the economy is still in expansion mode.
But economist Ruth Gregory at Capital Economics is one who think the composite PMI will have fallen below the 50 mark in August, which would be the first time since the last COVID-19 lockdown.
This is consistent with the economic forecasting group’s view that the economy will slip into recession this quarter.
Spending on travel and leisure services were reported to have supported activity in July, but Gregory said the squeeze on household real incomes from surging inflation is likely to mean this resilience will have proved short-lived.
She also said she “wouldn’t be surprised” the PMI prices balances could bring further signs that pipeline price pressures are easing.
“Even so, the recent surge in wholesale gas prices will soon filter through into higher energy costs for businesses, and the current tightness in the labour market means we think wage pressures will remain intense. That’s why we think the prices balances will probably remain at historically high levels for a while yet.”
The US PMIs will also be closely watched, said market analyst Marshall Gittler at BDSwiss, after the past week’s disastrous Empire State manufacturing survey, which “sent recession jitters down the market’s collective back”, though the Philadelphia Fed’s version of this index surprised on the upside.
Significant announcements on Tuesday
Interims: Aferian PLC (AIM:AFRN), RM Plc (LSE:RM.), John Wood Group PLC
AGMs: African Pioneer PLC (LSE:AFP), Bezant Resources PLC (AIM:BZT), Edge Performance VTC PLC, Kendrick Resources PLC (LSE:KEN), Livermore Investments Group Ltd, Xtract Resources PLC (LSE:XTR)
Economic announcements: Flash PMIs (UK, US), New Homes Sales (US)
US/China earnings: Intuit, JD.com, Medtronic, Nordstrom, Urban Outfitters, XPeng
WEDNESDAY 24 AUGUST
There’s a midweek lull in the schedule for London-listed results, but while construction group Costain PLC is reporting it is not expected to offer many surprises.
A recent trading update revealed revenues slightly ahead of expectations due to recovery mechanisms within contracts and increasing volumes across both divisions.
Operating profit was in line, reflecting operational progress and management of inflation, while broker Peel Hunt noted that supply chain pressures remained well-managed.
There was also no reference to legacy or contract issues, which the broker said would also be reassuring, given the company’s spotty history.
Given a strong cash performance, Peel Hunt increased its full-year average net cash from £90mln to £100mln.
More drama, as often, might come from a stateside direction, as chipmaker NVIDIA Corporation (NASDAQ:NVDA) published second-quarter earnings after Wednesday’s closing bell, though again it has already flagged that quarterly revenue will fall US$1.4bn short of the US$8.1bn guided, as sales of gaming chips weakened.
Profit margins are expected to be softer too, hit by a running down of excess inventory, while cost control will also be one of the key issues Wall Street will be watching. https://www.proactiveinvestors.co.uk/companies/news/990605/nvidia-seen-following-rivals-with-further-demand-warnings-990605.html
As it warned of “ongoing macroeconomic uncertainty” last time, this is projected to play out with lower spending on hardware, hitting demand for chips.
Significant announcements on Wednesday
Interims: Anglo Pacific Group PLC (LSE:APF, TSX:APY, OTC:AGPIF), Costain PLC
AGMs: Creightons PLC (LSE:CRL), Lamprell PLC (LSE:LAM, OTC:LMPRF)
Economic announcements: MBA Mortgage Applications (US), Durable Goods Orders (US), Pending Homes Sales (US), Crude Oil Inventories (US)
US earnings: Nvidia, RBC, Salesforce, Snowflake, Williams Sonoma, Victoria’s Secret
THURSDAY 25 AUGUST
Shares in CRH PLC (LSE:CRH), the Dublin-based, US-focused construction materials supplier, climbed strongly during the pandemic, partly on expectations that President Biden’s infrastructure bill would lead to strong demand.
It issued a positive first quarter update in April, saying sales, cash profits and margins for the first half were all expected to be ahead of the prior year, but alongside Thursday's half-year results, the FTSE 100-listed group is expected to give guidance for a slower second half performance.
Following sector peer Wood Group earlier in the week, it's now the turn of energy services provider Hunting.
Its shares have been treading water for years and it’s hard to see that changing with these interim, as a bullish trading update in July had little impact.
Doorstep lender Morses Club PLC (AIM:MCL) is set to report full-year results following the recent news of a potential scheme of arrangement to limit compensation liabilities to customers who were missold unaffordable loans.
However, with fewer competitors on the market and increasing consumer demands for quick cash from embattled households, results could be more favourable in the medium to long term.
Later in the day, the attention of macro-minded investors will turn to US GDP and the start of the Jackson Hole economic symposium of central bankers begins, while after the closing bell in New York will be earnings from Peloton Interactive (NASDAQ:PTON), where a recent memo revealed 800 jobs are to be shed in conjunction with the closure of warehouses and retail stores across North America.
“Given the light calendar, it’s a good week to take some time off and perhaps go fishing, for those of you who enjoy that sport,” suggested Marshall Gittler at BDSwiss. “One person who did was the redoubtable Paul Volcker, the 2.01 meter (6’7”) Fed chair from 1979 to 1987.
“The Kansas City Fed started holding an annual symposium in 1978. In 1982 they wanted Mr Volcker to attend so they moved the symposium to Jackson Hole, Wyoming, so that he could go fishing there. It’s been held there ever since.”
The three-day symposium brings together the great and the good in central banking and academic economics and, as Gittler adds, is “often – but not always – the site of some big announcement or hint to the market”.
Significant announcements on Thursday
Trading update: Benchmark Holdings PLC (AIM:BMK)
Finals: Hays PLC (LSE:HAS), Morses Club PLC
Interims: Anglo Pacific Group PLC, Benchmark Holdings PLC, CRH PLC, Faron Pharmaceuticals Oy (AIM:FARN, OTC:FPHAF), Grafton Group PLC (ISE:GFTU), Harbour Energy PLC (LSE:HBR), Hunting PLC (LSE:HTG), MacFarlane Group PLC, PureTech Health (LSE:PRTC, NASDAQ:PRTC, OTC:PTCHF) PLC
AGMs: Nuformix PLC (LSE:NFX), Triple Point Energy Efficiency Infra Company PLC
Ex-divs to reduce the FTSE 100 by 6.61 points: Auto Trader Group, Land Securities Group, Diageo, St. James's Place , Natwest Group, Mondi , Phoenix Group Holdings
Economic announcements: Car production (UK), Continuing Claims (US), GDP Preliminary (US), Initial Jobless Claims (US)
US and China earnings: Coty, Dollar Tree, Dollar General, Peloton, Pinduoduo, VMware, Workday
FRIDAY 26 AUGUST
On Friday the big bad news in the UK will be a rise in the price cap for energy bills, which everyone knows is coming but seems to be able to do nothing about.
Regulator Ofgem is expected to lift the annual price cap to over £3,500, up from the £1,971 cap that was brought in at the last seasonal review in April and £1,277 last October.
Some analysts predict energy bills could rise even more at the following revision in January, when the reviews switch to quarterly rather than seasonal.
In company news, the London diary looks bare, though there are some big companies announcing results in China and the US, which could have effects on the FTSE.
Meituan, the Chinese online food delivery giant, is the sixth largest holding of FTSE 100-listed Scottish Mortgage Investment Trust PLC (LSE:SMT), at 3.2%,
Earnings from the company come just days after its shares fell 10% on reports that even larger tech titan Tencent (also an SMT holding) was offloading most or all of its US$24bn stake.
In the US, it’s the turn of Dell Inc, which reported record revenue and profits for the first quarter of 2022 as it continued to cash in on rising demand for technology to support hybrid working.
The shares are up over 250% since the start of the pandemic.
US inflation will also be a big focus on Friday, in the form of the personal consumption expenditure (PCE) deflators that accompany personal income and spending figures.
Personal income is expected to be up 0.6% on the month and personal spending by 0.5%, about average over recent months.
The deflators are the Federal Reserve’s favourite measures of inflation, as used when officials make their summary of economic projections every quarter.
The month-on-month rate of increase is expected to fall sharply, to 0.1% on the month from 1.0% for the headline figure, while the core deflator falls to 0.3% month-on-month from 0.6% the month before.
Significant announcements on Friday
Economic announcements: Personal Consumption Expenditure (US), Personal Income (US), Personal Spending (US), U. of Michigan Confidence (US), Trade Balance (US)
US and China earnings: Dell, Marvell, Meituan