Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 72% of retail investor accounts lose money when spread betting and/or trading CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money.

The Week Ahead: Disney earnings, BoE rate decision, UK GDP

Read Michael Kramer's weekly market preview, or watch the video above for RRG Research’s analysis of major share indices.

Welcome to Michael Kramer’s pick of the top three market events to look out for in the week ahead. 

After a hectic period, markets will have a chance to catch their breath in what is set to be a comparatively lighter week on the macroeconomic data front. The past ten trading sessions saw volatility in equities, rates, and forex really ramp up. Particularly notable was the volatility in USD/JPY. On Monday 29 April the Japanese yen weakened past ¥160 against the US dollar for the first time since 1990, apparently prompting the Japanese authorities to intervene in the currency market twice.

UK economic data will be the focus in the coming week, with the Bank of England expected to hold the base rate at 5.25% on Thursday, ahead of first-quarter gross domestic product (GDP) figures on Friday. Meanwhile, although the US earnings season is past its peak, a few noteworthy updates remain in the pipeline, including Disney’s second-quarter results on Tuesday. 

Disney Q2 results

Tuesday 7 May: Disney will report its Q2 results before the start of trading, with analysts predicting that the company’s earnings grew by 18.2% year-on-year to $1.10 per share, as revenue increased by 1.5% to $22.1bn. Additionally, analysts estimate that streaming service Disney+ made a net addition of 4.7 million subscribers during the quarter, bringing the total user base to 155.6 million.

Although Disney’s stock has struggled for a couple of years, it has recently shown signs of turning a corner, rising 24% year-to-date to around $113. The question now is whether the Q2 results will be good enough to push the stock higher and maintain the uptrend of the last few months. The recent pullback – the shares have dipped roughly 8% since the start of April – has created what looks like a bull flag pattern on the charts, suggesting that the stock’s upward movement may not be over yet. The shares could move higher following Tuesday’s results, potentially climbing back to around $122. However, if the results disappoint investors and the stock breaks below support at $107, there could be a significant drop, with an unfilled gap down to around $98.

Bank of England interest rate decision

Thursday 9 May: While economists expect the Bank of England to hold interest rates at 5.25% on Thursday, the commentary emerging from the meeting will be crucial in shaping the outlook for future rate cuts. At the moment, the market expects the BoE to start its rate-cutting cycle in September, with the potential for a second rate cut by February 2025. 

Potential changes in interest rate differentials due to the Bank’s messaging could drive movement for the GBP/USD currency pair, which on Friday was hovering just above $1.25. A widening divergence between the US Federal Reserve’s and the BoE’ s monetary policies could weaken the pound against the dollar, while narrowing spreads may help push the pound higher. 

The pound has been consolidating sideways in a triangle pattern for over a year, with the $1.255 region acting as both support and resistance. A more “dovish” BoE (for example, a statement that hints at lowering rates in the near future) would likely result in GBP/USD failing to push above resistance at $1.255. In this scenario, the pound could return towards the lower trendline around $1.235. Conversely, a more “hawkish” message (say, one that doesn’t rule out the prospect of raising rates to tame inflation) could drive the pound higher against the dollar, possibly up to resistance around $1.27 or even to the upper side of the triangle around $1.28. On balance, though, it perhaps seems more likely that the BoE might lean towards a more dovish approach, potentially resulting in the pound moving lower against the dollar.

UK Q1 GDP

Friday 10 May: Analysts estimate that in the first three months of the year the UK economy grew by 0.4% quarter-on-quarter, up from a decline of 0.3% in the last three months of 2023. Their predictions also suggest that the economy showed no growth year-on-year, though flat GDP would mark an improvement from the contraction of 0.2% in the previous quarter. 

The improving economic outlook has certainly been welcomed by the FTSE 100, which has risen in recent weeks to all-time highs of more than 8,200 points. The footsie essentially traded sideways from February 2023 until March 2024. However, that has all changed, and now the index could rise further, potentially pushing to around 8,300 after breaking out of a period of consolidation. However, if the GDP report disappoints the market and the FTSE 100 slips below support at around 8,120, the index could drop to around 8,040 over the next couple of weeks.

Key economic and company events

Here’s our rundown of notable economic announcements and company reports scheduled for the coming week:

Monday

• China: Caixin services purchasing managers’ index (PMI)
• Eurozone: March producer price index (PPI), ECB press conference
• Results: Palantir (Q1), Vertex Pharmaceuticals (Q1)

Tuesday

• Australia: RBA interest rate decision
• Eurozone: March retail sales
• Germany: March factory orders, trade balance
• Results: BP (Q1), Duke Energy (Q1), Electronic Arts (Q4), Reddit (Q1), Rivian (Q1), Walt Disney (Q2)

Wednesday

• Germany: March industrial production
• Results: Airbnb (Q1), Arm Holdings (Q4), Boohoo (FY), Duolingo (Q1), Robinhood Markets (Q1), Shopify (Q1), Uber (Q1)

Thursday

• Australia: Q1 retail sales
• China: April exports, imports and trade balance
• UK: Bank of England interest rate decision 
• Results: Airtel Africa (FY), Brookfield (Q1), Hyatt Hotels (Q1)

Friday

• Canada: April unemployment rate
• UK: Q1 GDP, March industrial and manufacturing production
• US: May Michigan consumer sentiment index
• Results: International Consolidated Airlines (Q1)

Note: While we check all dates carefully to ensure that they are correct at the time of writing, the above announcements are subject to change.

Index dividend schedule

Dividend payments from an index's constituent shares can affect your trading account. View this week's index dividend schedule.

 


Disclaimer: CMC Markets is an execution-only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although we are not specifically prevented from dealing before providing this material, we do not seek to take advantage of the material prior to its dissemination.

Hello, we noticed that you’re in the UK.

The content on this page is not intended for UK customers. Please visit our UK website.

Go to UK site

Before you go…

Try a demo of our Spread Betting or CFD trading accounts on our innovative platform. Free of charge and risk-free with virtual capital starting from €10,000.

cmc-mobile-trading-app