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The Week Ahead: UK CPI, China GDP; Tesla, Netflix results

Read our preview of major economic and company events in the week commencing Monday, 16 October 2023 and view our earnings calendar. 

UK average earnings (September) 

Tuesday: Wages growth is likely to continue to cause headaches for the Bank of England, given that for the last two months it’s been trending at a record high of 7.8%, although with the addition of one-off bonuses the actual number has been well above 8%. This shouldn’t be a problem in the short term, given the massive hit to consumer incomes over the past 18 months that has made consumers worse off. 

It will take some time for the cumulative effect of the rate hikes of the last few months to be felt fully, so the Bank of England will have to exercise patience when it comes to seeing how their monetary medicine has been absorbed by the patient. This means that while rates may not need to rise further, they will need to stay higher for longer, with little prospect of a rate cut much before the second half of 2024. The latest ILO unemployment figures increased modestly from 4.2% to 4.3%, and is expected to remain unchanged. 

US retail sales (September) 

Tuesday: The US consumer has continued to show remarkable resilience in the second half of this year. After a slow start to the year US retail spending has got stronger as the year has progressed, driven mainly by a strong labour market and low unemployment. The rise in gasoline prices will no doubt cause some slowdown on discretionary spending however both July and August saw resilient levels of retail sales of 0.5% and 0.6%, with this week’s September retail sales figures expected to see a modest slowdown to 0.2%. The recent US consumer credit numbers showed that US consumers pulled back spending quite sharply in September which raises the risk that we might see a downside surprise. 

Goldman Sachs Q3 results 

Tuesday: Share price wise, Goldman Sachs hasn’t done well year to date with the shares trading close to their lows of the year. Their Q2 numbers were disappointing with profits falling short of market expectations, even as revenues came in ahead of forecasts at $10.9bn. The shortfall in profits, which fell 58% was partly due to a $584m impairment tied to its GreenSky operation while there was also a $485m in respect of real estate write-downs. CEDO David Solomon has come under increasing scrutiny for his stewardship of the bank at a time when Goldmans most important revenue earners of investment banking and trading are struggling, while the venture into retail banking has run into the sand. Fixed income trading revenue fell by 26% in Q2, although equities trading managed to hold its own. As we look towards this week’s Q3 numbers the recent volatility in bond markets may well have offered boost, however revenues are still expected to see a decline to $11.3bn while profit is expected to fall to $6.35 a share.    

China GDP (Q3)

Wednesday: There’s been little to no indication that the Chinese economy has improved significantly ahead of the release of its Q3 GDP data. In Q2, the economy expanded by 0.8%, which was slightly higher than the 0.6% expected, and the numbers for Q3 are expected to show a slight improvement to 1%. 

While there is an enormous amount of scepticism about the accuracy of Chinese economic numbers, there is little doubt given how poor recent trade data has been, that the Chinese economy is being hit by a slowdown in global demand, as well as domestic demand. Industrial production has been steady over the past three months, averaging just over 4% a month, but retail sales have struggled. In Q2, we were seeing double-digit gains in retail sales, although the comparatives were weak. Retail sales have slowed sharply in the third quarter, with gains of 2.5% and 4.6% in July and August. September retail sales are expected to remain steady at 4.6%, while recent PMI data has shown that service sector performance has also been patchy.  

UK consumer price index (September) 

Wednesday: The Bank of England caught a lot of people on the wrong foot when they decided by a narrow majority to keep interest rates unchanged at 5.25% last month. One of the reasons they decided to call a halt to 14 successive rate rises may have been the sharp slowdown in core CPI in data released the day before the announcement. Core CPI slowed from 6.9% to 6.2% in September, while headline CPI slipped to 6.7%, when most people had been expecting an increase. 

One of the major leading indicators in recent months for the easing inflation picture has been sharp slowdowns in headline producer price index (PPI) data since the start of the year. These have been in negative territory for both input and output prices over the last two months, which ought to bode well for further weakness in CPI inflation going forward, although higher fuel prices are likely to keep underlying inflation sticky. This will be a challenge for the Bank of England when they meet in just over two weeks’ time, however with new forecasts due at the November meeting, it would be a brave central bank if they decided to resume hiking when the economy continues to look weak.  

Whitbread half-year results 

Wednesday: Premier Inn owner Whitbread shares have seen some solid gains so far year to date as the UK business continues to show a strong recovery from the impacts of the Covid pandemic. In June the company reported a 19% increase in total revenue for Q1. The UK performed strongly with total sales growth of 16%, with accommodation seeing an 18% rise, as consumers managed to absorb higher prices. Food and drink sales were also strong with an increase of 10%.  The German market also continued to improve with a 124% increase in sales. On the outlook, forward bookings for Q2 have been trending well ahead of last year with management keeping full year guidance unchanged. Since those numbers were released, the shares hit their highest level since February 2020 back in September but have since retreated from those 3-year highs, on the back of concerns that higher inflation will impact the second half of the year. H1 revenues are expected to rise to £1.5bn with revenue per room expected to rise by £7.08p. Occupancy rates in the German business is expected to rise to 68%, while in the UK occupancy rates are at 84%. 

Bank of America Q3 results 

Wednesday: The Bank of America share price has been on a slow slide lower since its Q2 results were released in July, with the shares now at their lowest levels since October 2020. The decline has come about despite a positive set of Q2 results, which saw the bank report a 19% rise in profit to $7.41bn, or $0.88 a share. Revenue was also strong, rising 11% to $25.33bn, with improvement driven by strong gains in net interest income from higher rates. 

Given this backdrop, it’s the share price decline is surprising, begging the question as to why the shares aren’t performing. Are investors pricing in concern about future earnings, or is there something else at play? It’s been notable that we’ve seen some shareholder sales over the past few months. There are also concerns over unrealised losses on US treasuries on the back of the recent sharp rise in yields. These losses could be as high as $100bn and although this seems high, the bank still has high levels of liquidity, which suggests that these concerns may be overblown. For Q3, revenue is expected to come in at $25.17bn, with profit of $0.82 a share. 

Netflix Q3 results 

Wednesday: In the period leading up to its Q2 numbers, Netflix shares hit their highest levels since February 2022, but have slipped back since then after revenue came in short of expectations at $8.19bn. Profit however was much better than expected, coming in at $3.29 a share. The crackdown on password sharing doesn’t appear to be hurting subscriber numbers too much so far, with 5.9m new customers added during the quarter. 

Netflix continued its reluctance to break down revenue for its ad-supported tier, although it did say it had 5 million active users so far as it rolls out its crackdown. For Q3, Netflix expects revenue of $8.5bn, and a similar rise in new subscribers for Q3. Profit is expected to come in at $3.52 a share, or $1.58bn. 

The streaming industry is also having to contend with the impact of writers and actors strikes, and while Netflix said it expects to see better cashflow because of the strikes due to not having to pay out as much on new content, any impact from the strike isn’t likely to be felt when it comes to new content until next year. Operating margin is also expected to improve to 22%, with full-year operating margin forecast to be between 18 and 20%. 

Tesla Q3 results 

Wednesday: When Tesla reported its Q2 numbers in July, the shares fell sharply despite record revenue at $24.93bn over the quarter. Profit came in at $0.91 a share, however operating margins were lower, slipping back to 9.6%. Tesla’s share price declines gathered pace after CEO Elon Musk said that vehicle production was likely to slow in Q3 due to factory shutdowns. There was also little detail on when investors would see the unveiling of the new Cybertruck. 

Musk kept the full-year target of 1.8m vehicle deliveries, even as Tesla confirmed that 466,140 cars were delivered during Q2. Earlier this month, Tesla confirmed that vehicle deliveries slowed to 435,059, well below forecasts, with production downtime at the Shanghai and Austin gigafactories accounting for most of the shortfall. The Q3 figures are once again expected to be focused on margins as the price war continues. Its other businesses, which include energy generation and storage, have grown strongly over the past 12 months, with a 74% increase in Q2 revenue to $1.51bn. 

Tesla’s Q3 revenue is expected to fall modestly from Q2 to $24.6bn, while profit is expected to come in at $0.77 a share.

Deliveroo Q3 results 

Thursday: has seen strong gains so far year to date having spent most of last year flirting with the 80p level. Since March the shares have seen strong gains pushing up to one-year highs in the summer. To try and narrow its losses and focus on moving into profit the company has shifted its focus to improving its revenues rather than focussing on the number of orders. In H1 Deliveroo reported a 5% increase in revenues to just over £1bn, despite a 6% decline in orders. Despite lower orders Deliveroo managed to deliver a 10% improvement in GTV per order to £24.20, while boosting gross profit to £365.1m. Losses narrowed to £82.9m from £153.8m a year ago. Deliveroo also raised its full year adjusted EBITDA guidance from £20-£50m to £60-£80m, with its expansion into grocery likely to continue the positive momentum that has been generated over the past 9 months in terms of revenue growth. Bank of America recently restarted its coverage of Deliveroo with a buy rating and a 151p price target, saying it expects to deliver greater density of orders and further efficiency of fulfilment. 


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


Monday 16 OctoberResults
Rio Tinto (UK)Q3
Tuesday 17 OctoberResults
Bank of America (US)Q3
Bellway (UK)Full-year
Goldman Sachs (US)Q3
Johnson & Johnson (US)Q3
Seraphim Space Investment Trust (UK)Full-year
United Airlines (US)Q3
Wednesday 18 OctoberResults
Alcoa (US)Q3
Equifax (US)Q3
Morgan Stanley (US)Q3
Netflix (US)Q3
Tesla (US)Q3
Whitbread (UK)Half-year
Thursday 19 OctoberResults
Deliveroo (UK)Q3
Philip Morris International (US)Q3
Snap-on (US)Q3
Friday 20 October Results
American ExpressQ3

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

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