Select the account you'd like to open

The week ahead: UK earnings & unemployment, ECB rate decision, JD Sports results

Watch our week ahead video preview, read our pick of the top stories to look out for this week (9-13 September), and view our key company earnings schedule.

Chief market analyst, Michael Hewson, looks ahead to this week’s equity market rebound, and what to expect from the upcoming ECB rate meeting. He also looks at the latest Brexit developments, UK wages data, the outlook for the US dollar and key levels on EUR/USD, GBP/USD, EUR/GBP and the S&P 500.

We can expect to see a vote on whether there will be a general election before 31 October, once the Queen's consent has been given to a bill that forces the UK prime minister to ask for a Brexit extension, if he is unable to get a deal by 19 October. This all needs to happen before parliament breaks for recess later this week. Boris Johnson is also expected to meet Leo Varadkar, the Irish PM, in Dublin.

China trade balance (August) 
Sunday: The most recent China trade numbers showed that the Chinese economy appeared to pick up in July, with exports to non-US destinations helping to drive an increase of 3.3%, the best performance since March. Imports, on the other hand, were disappointing, though they did show an improvement despite declining 5.6%. It’s clear that internal demand is struggling to recover, with retail sales showing an improvement in the second quarter of the year when compared to Q1. A pickup in the services sector appears to be helping offset the weakness in manufacturing, however this seems to be as a result of lower prices, as factory gate prices contract.

UK unemployment & earnings (July) 
Tuesday: Every month we’ve been subjected to reports of job losses across a range of sectors, yet for now the unemployment rate has been anchored near 3.8%, its lowest level since the 1970s, though we did tick higher to 3.9% in June. The last three months have seen a marked slowdown, with Q2 showing a contraction of 0.2%. Q3 doesn’t appear to be offering much hope of change, however wages have continued to hold up well, continuing to pick up despite a weak economic backdrop. In June, wages excluding bonuses rose by 3.9%, an 11-year high, and the eleventh successive month of wage gains over 3%. It also pushed real wages growth up to a three-year high, with this week’s numbers expected to see wage growth of 3.7%. 

Bovis Homes Group half-year results
Tuesday: Against a backdrop of a slowing housing market, the performance of UK housebuilders since the Brexit referendum has been mixed at best. Despite these challenges, Bovis Homes has been one of those whose share price performance is well above its post-referendum lows and where sales, margins and prices have improved. In July, the company said that completions were up 4% on the year before, to 1,647. The average total selling price also rose 3% to £270,000. The company’s forward guidance was also positive, with expectations of an improved financial performance on track for the financial year. Investors will be looking for any signs of a change to this guidance.   

JD Sports Fashion half-year results 
Tuesday: Amid all of the stories about the wasteland of UK retail, JD Sports has been one of the notable outperformers in the sector. Helped by a combination of sound business strategy, store renovations, and a focus on athletic-inspired footwear and apparel, along with some shrewd acquisitions, revenues have gone from £1.8bn in 2016 to an expected £5.6bn in the upcoming financial year. Having recently entered the FTSE 100, investors will be looking for these expectations to be maintained in the latest update, in the hope that we can see further record highs for the share price. 

Apple iPhone 11 launch 
Tuesday: This week we’ll get the launch of another upgrade to the iPhone, this time the iPhone 11, and it has the potential to be a fairly underwhelming affair. The fact is that with iPhone sales in decline and the global economy slowing, it’s hard to see that slide being arrested with a few new, fancy upgrades. The new phones also don’t support 5G yet, and given that new phones with 5G are expected next year, why would anyone spend nearly £1,000 on a phone that will have out of date technology within 12 months?

European Central Bank rate decision
Thursday: There’s been a great deal of speculation about what measures the ECB will take at this latest meeting of the governing council. It seems a given that the bank will cut rates, however it remains unclear by how much, and whether they will cut all three lending rates by the same amount. The deposit rate is already at a record low of -0.4%, but with German two-year yields at -0.8%, the scope for a big cut has already been priced in. The big question now is what other measures the ECB will enact in addition to the start of the TLTRO programme, which has already been pre-announced, and starts this month. The weakness of the banking sector is already a cause for concern, and there are worries that the ECB could make matters much worse. These concerns have prompted some ECB policymakers to express concern about the wisdom of further QE in the last few days. More to the point, what will the political reaction be to further easing measures? The US president has already been highly critical of the recent weakness in the euro. The ECB’s biggest problem however, is that for all of its efforts there has been no corresponding political heavy lifting, which means that any new measures are unlikely to lift demand. 

Morrisons H1 results 
Thursday: The UK food retail sector has been in the doldrums for several years now, impacted by the pressure on margins from changing retail habits, as well as the relative new kids on the block, Aldi and Lidl. Despite improving sales and profits, Morrisons’ share price has struggled this year – it’s down over 10% year to date. In the latest Kantar survey, there were some signs of a pickup, however the company struggled on its comparatives, with Aldi leading the way. It is to be hoped that its cooperation with Amazon will help augment its numbers in the coming months, after the announcement in the summer that the two counterparties are set to expand their same-day delivery service across the UK. 

Broadcom Q3 results
Thursday: Semiconductors have been at the forefront of the US-China trade war, given concerns about the impact of tariffs on their global business. In June, Broadcom slashed its revenue forecasts for the 2019 fiscal year, taking a $2bn hit from the ban on Huawei. The guidance was lowered to $22.5bn, down from $24.3bn. One advantage Broadcom has is its diverse business model, with franchises in storage, wired and wireless infrastructure, as well as software with its acquisition last year of CA technologies, plus this month’s acquisition of Symantec’s enterprise security business in August for $10.7bn.   

Kroger Q2 results
Thursday: One of the US’s key grocery store brands, based in Ohio, Kroger recently signed a deal with Ocado in an attempt to take the fight to Amazon and Walmart. The company has also been investing heavily in revamping its stores and online operations, and this has weighed on its recent numbers. In Q1 the company saw its profits come in above expectations, however same-store sales slowed from Q4, raising concerns that the new strategy is struggling to gain traction with consumers. Kroger kept its forecasts for 2019 unchanged at $2.15c to $2.25c a share, with same-store sales set to come in above 2%.

US retail sales (August) 
Friday: Despite President Trump ramping up the trade rhetoric at the beginning of August to include all Chinese imports to the US, consumer confidence only saw a modest drop off from the highest levels seen in July this year. This was a little bit of a surprise, however with wages growth trending above 3%, and unemployment still at multi-year lows, maybe we shouldn’t have been shocked. Consumer spending has been strong for most of this year, and so far has shown little sign of slowing, with a rise of 0.7% in July. Can August continue the trend that’s been in place for the last three months?

JD Wetherspoon full-year results
Friday: As pub chains go, Wetherspoon has been one of those that has defied the wider sector. Its shares are up over 40% year to date, despite reporting in July that it expected profits to fall slightly due to higher staff costs and business rates, which are eating into its margins. Total sales are expected to have risen by 7.4%, helped by the sales of gin craft beers, and tea and coffee. This would normally be translated into higher profits, and the fact that it hasn’t is likely to be a concern in the longer term. Even so, these numbers are well in excess of its sector peers, which has seen competitors succumb to takeover or the disposal of key assets in order to keep themselves viable.

Index dividend schedule

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

Selected UK & US company announcements

Monday 9 SeptemberResults
Abcam (UK)Full-year
Aspen Group (US)Q1
Tuesday 10 SeptemberResults
Bovis Homes Group (UK)Half-year
Cairn Energy (UK)Half-year
Dave & Buster's Entertainment (US)Q2
Francesca's Holdings (US)Q2
GameStop (US)Q2
HD Supply Holdings (US)Q2
Hilton Food Group (UK)Half-year
JD Sports Fashion (UK)Half-year
Vectura Group (UK)Half-year
Xaar (UK)Half-year
Wednesday 11 SeptemberResults
Advanced Medical Solutions (UK)Half-year
Ashtead Group (UK)Q1
Biffa (UK)Q2
Capital & Regional (UK)Half-year
Chemring Group (UK)Q3
Oxford Industries (US)Q2
Soco International (UK)Half-year
Tailored Brands (US)Q2
Thursday 12 SeptemberResults
Broadcom (US)Q3
Duluth Holdings (US)Q2
MasterCraft Boat Holdings (US)Q4
Safestore Holdings (UK)Q3
Vince Holding (US)Q2
Wm Morrison Supermarkets (UK)Half-year
Friday 13 SeptemberResults
JD Wetherspoon (UK)Full-year

Company announcements are subject to change. All the events listed above were correct at the time of writing.


Sign up for market update emails