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The Week Ahead: BoJ rate decision; UK GDP; US PCE; Carnival results

Notable economic events in the week ahead include the Bank of Japan’s interest rate decision on Tuesday, the final reading of the UK’s Q3 GDP on Thursday, and the November print of the US Federal Reserve’s preferred inflation gauge on Friday. In another quiet week for earnings updates, Nike, cruise operator Carnival, and FedEx will deliver their latest results. 


Monday 19 December

No major scheduled announcements

Tuesday 20 December

Bank of Japan interest rate decision

Inflation in Japan is running at low levels compared to rates in other developed economies, allowing the country’s central bank to maintain ultra-low interest rates. Although the Bank of Japan has lifted its 2022 inflation estimate to 2.9%, up from a previous forecast of 2.3%, it is expected to keep its key short-term interest rate at -0.1% and hold the 0% cap on its 10-year bond yield at this month’s meeting. 

Meanwhile, the US dollar’s recent decline has eased concerns over a weak yen. In October, $1 was worth more than ¥150, triggering the Bank of Japan’s intervention in currency markets. Now, though, one dollar buys only about ¥136.7, a level that is likely to make policymakers in Tokyo much more relaxed. 

Some of the recent yen strength stems from talk that the BoJ might shift its policy on yield curve control, now that consumer price inflation has risen to 3.7% – the highest level in eight years. However, such a move appears unlikely. Japan’s central bank has committed to a policy of “inflation overshoot” and seems to have no intention of squeezing the brakes on its exceptionally loose monetary policy.

FedEx Q2 results

FedEx shares hit a two-year low in September after the delivery firm brought forward its Q1 earnings announcement. The company warned of a significant business slowdown as revenue of $23.2bn and earnings per share of $3.44 both missed consensus estimates. FedEx also withdrew its full-year profit guidance, which was a surprise given that the company had raised it just a few months earlier, insisting that increased prices could offset higher operating costs. The upwardly revised guidance seemed optimistic in Q1, but the decision to toss it out of the window at the end of Q2 caused dismay. 

The company expects Q2 revenue to be around $23.75bn, which would represent a decline of 4% year-on-year. The company also plans to take further measures to raise prices and cut costs as it looks to save around $2.7bn. The cost-cutting plans are said to include axing flights and closing underperforming offices. Earnings per share in Q2 are expected to come in at $2.80.  

Nike Q2 results

Nike shares slipped to a two-year low in October on concerns that its China business could see an even bigger revenue decline than the 19% fall in Q4 last year. 

Ahead of its Q1 update Nike said that it expected revenue to be flat or up slightly year-on-year, despite increased costs and Covid-related disruptions to its operations in China. This turned out to be accurate as Q1 revenue rose 4% to $12.69bn. However, net income fell 22% to $1.5bn, or $0.93 a share. But what really sent the shares tumbling was a 44% rise in inventory to $9.7bn, with an even bigger increase in the US where inventory increased 65%. Sales in Greater China fell 16% to $1.7bn, though sales in the US increased. 

For Q2, Nike expected revenue growth in the low double-digits, driven by a pickup in consumer demand. This could prove optimistic given the continuation of lockdowns in China and evidence of a slowdown in US consumer spending. Profit for the quarter is expected to come in at $0.65 a share.

Wednesday 21 December

US consumer confidence index

US consumer confidence has weakened, despite signs that inflation is easing. The Conference Board’s US consumer confidence index decreased to 102.5 in October from 107.8 in September, partly because higher interest rates are weighing on the US housing market. Property sales have fallen in every month except January this year. 

Also, service sector inflation is becoming stickier and this appears to be affecting consumption. Higher prices are expected to send the consumer confidence index below 100 to a four-month low.

Carnival Corp Q4 results

Cruise operators, like most companies in the travel sector, have had a difficult three years. After a partial recovery in 2021, Carnival’s US-listed shares have fallen more than 50% this year as the tourism industry struggles to get back on its feet. 

In 2019, the last full year before the Covid-19 pandemic, Carnival’s annual revenue was $20.8bn – a level unlikely to be matched until 2024 at the earliest. That said, total revenue this fiscal year should comfortably exceed that of 2021, when revenue collapsed to $1.9bn. 

In Q2 the company incurred a bigger-than-expected loss of $1.9bn as revenue fell short at $2.4bn. However, occupancy rates rose to 69% from 54% in Q1 as booking volumes almost doubled. 

In Q3 losses again exceeded expectations, with the company posting an adjusted net loss of $688m as fuel costs rose. Revenue grew on a quarterly basis to $4.31bn, but missed consensus estimates of $4.8bn. 

Carnival said that it expects to post another quarterly loss in Q4 after it offered discounts to drive up bookings. However, passengers have cut their on-board spending, with revenue per passenger still below pre-pandemic levels. The Q4 loss is expected to come in at around $0.86 a share. 

Thursday 22 December


The final reading of the UK’s third-quarter gross domestic product is likely to confirm that the British economy contracted by 0.2% in the three months to September. This follows an expansion of 0.2% in Q2. 

A 0.5% fall in household expenditure was among the main drags in Q3. Meanwhile, monthly estimates suggest that GDP fell by 0.6% in September, in part due to the bank holiday for Queen Elizabeth II’s state funeral. 

Although the overall contraction in Q3  was slightly better than expected, the UK economy – like other major economies – has been negatively impacted by high inflation and falling real-terms earnings. In the UK, government in-fighting and economic missteps have exacerbated these problems. 

Friday 23 December

US core PCE price index (November)

The Federal Reserve’s preferred inflation gauge eased in October, lending weight to the narrative that US inflation has peaked. The core personal consumption expenditures (PCE) price index, which excludes volatile food and energy prices, increased 5% in the year to October, down from 5.2% in September. A further easing in November could help determine the pace of future US interest rate rises. On Wednesday, the Fed raised rates by half a percentage point, ending a run of four consecutive 0.75-point hikes. 

Recent producer and consumer price index prints have shown that inflation is coming down, albeit perhaps not as fast as some in the peak-inflation camp might like. Depending on how quickly US inflation continues to fall, we may get another half-point rate rise when the Fed next meets at the end of January, or we may see a step down to 0.25 percentage points.


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Heico (US)Q4
Steelcase (US)Q3
CalAmp (US)Q3
Calavo Growers (US)Q4
Enerpac Tool Group (US)Q1
FactSet Research Systems (US)Q1
FedEx (US)Q2
General Mills (US)Q2
Nike (US)Q2
Worthington Industries (US)Q2
Carnival (US)Q4
Cintas (US)Q2
Micron Technology (US)Q1
MillerKnoll (US)Q2
Rite Aid (US)Q3
Toro (US)Q4
Apogee Enterprises (US)Q3
CarMax (US)Q3
Limoneira (US)Q4
Mission Produce (US)Q4
Paychex (US)Q2
No major announcements 

Note: Company announcements are subject to change. Dates correct at the time of writing.

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