The summer lull meanders on in the coming week but there should be some tasty corporate morsels for news-hungry investors to chew on, including results from Bunzl, Kainos, Ashmore, HP and Lululemon.
With stocks being roiled by macroeconomic concerns in recent months, there are some important data releases, including the US jobs report and UK housing and retail sector numbers.
TUESDAY 30 AUGUST
With Monday a bank holiday in the UK, London’s trading week will kick off with half year results from the likes of Bunzl, CentralNic and Old Mutual.
As a distributor of items such as coffee cups, lavatory paper and cleaning fluid, Bunzl PLC (LSE:BNZL) may not be the most exciting of companies (it had been suggested that ‘reassuringly dull’ could be its motto but it is a favourite of may wily investors from large funds to armchair experts.
This is mainly for its 29 years of dividend growth (with only a short hiatus during the early months of the Covid pandemic), though its forecast yield is not the biggest, at around 2%.
For the whole year, the expectation is for a 9% increase in the dividend.
At its last quarterly update, the FTSE 100 group revealed 16% sales growth, or 12%-13% at constant currencies, with inflation said to be one key driver of revenue.
Analysts at Shore Capital said Bunzl offers "excellent scope" to drive further steady forecast upgrades in the second half of the year and into next – but UBS warned that they expect a slowdown in the second half of the year “as the benefits from plastic/pulp inflation start to annualise and as Covid benefits continue to fade”.
The main UK macro news will be mortgage approvals from the Bank of England for July, following figures for the previous month that undershot forecasts.
The 63,726 figure for June was the seventh time in twelve that approvals had fallen month-on-month and the eleventh consecutive year-on-year decline, also undershooting the 12-month average that prevailed in the lead up to the pandemic.
“Monthly approvals are no higher now than they were in summer 2013, shortly after the launch of Help to Buy by then-Chancellor of the Exchequer George Osborne,” said analyst Russ Mould at AJ Bell, though listed housebuilding companies continue to assert that demand for new dwellings remains strong.
Among the possible explanations for this slide in mortgage applications, one major rising factor is interest rates, with Mould also pointing to the loss of the stamp duty land tax exemption, the imminent closure of the Help to Buy scheme and the effects of inflation, which is eroding wages in real terms and is another factor when it comes to affordability.
Significant announcements on Tuesday
Finals: Braemar Shipping Services (LSE:BMS) PLC
Interims: Bunzl PLC (LSE:BNZL), CentralNic Group PLC (AIM:CNIC), Old Mutual Limited (LSE:OMU) PLC
AGMs: Albion Enterprise VCT PLC, Sivota PLC (LSE:SIV)
Economic announcements: Mortgage Approvals (UK), Consumer Credit (UK), M4 Money Supply (UK), House Price Index (US), Consumer Confidence (US)
US earnings: Baidu, BestBuy, CrowdStrike Holdings, Hewlett Packard Enterprise, HP Inc (NYSE:HPQ)
WEDNESDAY 31 AUGUST
Company results on Wednesday include life and pensions company Chesnara, healthcare services provider Uniphar and animal pharmaceutical specialist ECO Animal.
With a shortage of FTSE 350 news, midweek is likely to see more focus on the housing market, with house price data from lender Nationwide.
A month ago, prices were revealed to have risen at the slowest monthly pace in a year, with the building society warning the market is likely to slow further as the cost-of-living squeeze tightens and the Bank of England keeps raising interest rates.
With other house price data showing the market may even have moved into reverse, analysts said this could be the 'canary in the coal mine' of the economic downturn and a coming recession.
In the US, there will be earnings from membership-only retailer CostCo, which last quarter reported a big fall in its profit margins due to soaring freight and labour costs, and Jack Daniel’s distiller Brown-Forman (NYSE:BF.B).
Significant announcements on Wednesday
Finals: Eco Animal Health Group PLC (AIM:EAH)
Interims: Bank of Cyprus Holdings PLC, BBGI Global Infrastructure S.A, Bens Creek PLC, Chesnara PLC (LSE:CSN), Flowtech Fluidpower (AIM:FLO) PLC, Uniphar PLC (AIM:UPR)
AGMs: Fulham Shore PLC (AIM:FUL), Invinity Energy Systems PLC (AIM:IES), Latham (James) PLC
Economic announcements: BRC Shop Price Index (UK), Nationwide House Price Index (UK), MBA Mortgage Applications (US), Chicago PMI (US), Crude Oil Inventories (US)
US earnings: CostCo, Brown Forman
THURSDAY 1 SEPTEMBER
Kainos Group PLC (LSE:KNOS), the business software and IT services group, has gained more fans during the pandemic and it has held onto many of them.
Its shares are down around a quarter this year but still up around 80% since the start of 2020, with its latest updates in April and May revealing rising sales and profits.
One of the things people like about Kainos is it “has a broad mix of different customers, from both the public and private sectors, across both healthcare and commercial customers,” says analyst Sophie Lund-Yates at Hargreaves Lansdown, pointing to its £260mln contracted backlog last year.
“We don’t expect this to be interrupted in next week’s trading statement. A lot of the sorts of products on offer are things companies will still want to spend on, even with the economic outlook looking a bit gloomy.
“One thing we will be watching for is any commentary on the margin outlook. Kainos has been sacrificing margins in the name of growth. This isn’t an unusual tactic for a fast-growing tech company, but we’d like some further information on this strategy.”
Eurocell interims should be interesting, reckons broker Peel Hunt, opening the window on how the markets for renovation and new build housing are performing amid the recent economic downturn – and potentially giving some clues ahead of updates from the likes of Berkeley, Barratt and Vistry in the housebuilding sector in the coming fortnight.
“Clearly, there are major concerns about the renovation market softening as consumers cut back spending on the back of higher energy bills and interest rates,” said analyst Clyde Lewis.
“To date, the new build housing market has continued to perform strongly with big order books across the whole sector. However, there is clearly some risk of slowing demand for new houses as interest rates climb.”
Significant announcements on Thursday
Finals: Johnson Service Group plc (LSE:JSG), Omega Diagnostics Group PLC (AIM:ODX)
Interims: Alfa Financial Software Holdings Ltd, Camellia (LSE:CAM) PLC, Eurocell PLC (LSE:ECEL), Gem Diamonds Ltd, Gulf Keystone Petroleum PLC, PPHE Hotel Group Ltd, Wentworth Resources PLC (AIM:WEN)
Trading updates: Kainos PLC
AGMs: Carclo (LSE:CAR) PLC, Jet2 PLC (AIM:JET2), JLEN Environmental Assets Group Ltd (LSE:JLEN), Picton Property Income Limited
Ex-dividends to reduce FTSE 100 by 9.99 points: Glencore, InterContinental Hotels, Admiral Group, Antofagasta, Endeavour Mining
Economic announcements: PMI Manufacturing (UK), Continuing Claims (US), Initial Jobless Claims (US), PMI Manufacturing (US), Construction Spending (US), ISM Manufacturing (US), ISM Prices Paid (US)
US earnings: Broadcom, Campbell Soup, Ciena (NYSE:CIEN), DocuSign, Hormel Foods (NYSE:HRL), Lululemon Athletica (NASDAQ:LULU)
FRIDAY 2 SEPTEMBER
The first Friday of the month generally means it is time for the must-watch US non-farm payrolls (NFP) report.
After last month's blockbuster print of 528,000 new jobs, this month people will be looking to gauge any signs of a slowdown.
NFP will be especially important for markets, said analysts at Deutsche Bank, “as investors try to reconcile the bleak data on economic activity with a very tight labour market”.
Deutsche economists expect a 300k reading and forecast a 0.1 percentage point uptick in the unemployment rate to 3.6%, with average hourly earnings to cool from +0.5% to +0.4% on the month.
“This print will be the last one before Fed's next meeting on September 21 and follow the recent string of misses in a number of economic indicators, as well as a downside surprise on inflation.
“So the question of whether the labour market is beginning to soften and what that means for inflation will likely be key for the FOMC as they decide between a +50bps and +75bps hike next month.”
In London company news, there will be year-end results from Ashmore Group (LSE:ASHM) PLC, the specialist emerging markets asset manager, has already reported its year-end headline numbers, so the main investor focus will be on its management fees and earnings.
Analysts at UBS noted that Ashmore trades at 13.5 times forward earnings or 7.3x if excluding the companies excess capital position.
“Except for the sharp (but brief) decline recorded in Mar-20, this is the lowest ASHM has traded since 2015.”
Significant announcements on Friday
Finals: Ashmore Group (LSE:ASHM) PLC, Time Finance plc (AIM:TIME)
Economic announcements: Non-Farm Payrolls (US), Unemployment Rates (US), Factory Orders (US)