Watch our week ahead video preview (above), read our top eight stories to look out for this week (8-12 October), and view our key company earnings schedule.
Chief Market Analyst Michael Hewson looks back at this week’s rise in US yields and the US dollar, and also looks ahead to the return of Chinese markets, the latest UK data, and the outlook for markets in general.
UK GDP & trade balance
Wednesday: Last week’s September PMI numbers showed that the UK economy ended this quarter on a positive note, with manufacturing at a four-month high after a slowdown in August. This week’s monthly GDP number is expected to show an economic expansion.
UK manufacturing and industrial production (August)
Wednesday: Recent PMI data showed that manufacturing activity slowed sharply in August, with exports particularly weak. Whether this was a holiday-induced slowdown won’t be known until next month’s numbers. Nonetheless, July was a decent month and September looks reasonable as well, if recent PMI surveys are any guide. There are also concerns that the slowdowns being seen globally could impact the UK economy.
WH Smith full-year results
Thursday: For several years now WH Smith has been a declining presence on the UK high street – the company was voted the UK’s worst high street retailer earlier this year. Common complaints included high prices, tired stores and rude staff, which explains the lower footfall at the company’s high street shops. It’s a slightly different story where the company has stores at transport hubs like airports and railway stations, as these revenues have been rising. Its travel arm was also a positive contributor to the half-year numbers in April. Investors will be hoping that the positive trends outlined in the first half continue with this week’s full-year numbers.
US CPI (September)
Thursday: At the most recent Federal Reserve rate meeting, Fed chief Jay Powell was at pains to admit that US policymakers aren’t seeing much evidence of inflationary pressures. That hasn’t stopped US policymakers stepping back from the prospect of further rate rises, with a strong CPI number likely to underpin expectations for rate rises in the months ahead. Last month we saw a surprising fall in the headline number for August, from 2.7% to 2.5%, which was largely treated as transitory. A rebound will reinforce the narrative around higher yields and a stronger US dollar.
Walgreens Boots Alliance Q4 results
Thursday: When Walgreen’s posted its Q3 earnings at the end of June, the shares tanked to 52-week lows over concern about falling same-store sales. This was despite the fact that headline earnings and profit slightly beat expectations. The sell-off was given added traction by Amazon’s plans to acquire online pharmacy PillPack, as investors fretted about the ability of this ubiquitous US brand to compete in an increasingly competitive online market space. Since then the shares have rebounded strongly, helped in some part by a $10bn stock buyback. However, in the past few days the shares have slipped back, after the company was fined $34.5m by the SEC for misleading investors on profit targets it gave back in 2013 when it was looking to acquire all of Alliance Boots.
China trade balance (September)
Friday: The further implementation of tariffs by the US last month could have significant effects on the Chinese trade surplus in September. Judging by recent US data, the imposition of 10% tariffs by China appears to have made little difference on the US side; however, these will be the first numbers that could be affected by the $200bn worth of tariffs that kicked at the end of last month. Exports did slow in August, rising only 9.8%, which was down from 12.2% in July. Imports were slightly more positive, rising 20%, however the slowdown in manufacturing could see these flows slow further in September.
JP Morgan & Citigroup Q3 results
Friday: Halfway through the second part of the year, the US economy shows no signs of slowing down. Consumer spending appears to be holding up well and the US central bank has raised rates for the third time this year. M&A activity has also continued to hold up, which should mean decent fee income. On the downside, housing appears to be showing signs of slowing. The flattening yield curve could also weigh on banks’ profitability in other areas, while recent market volatility (or the lack of it) in the last three months could offer up some disappointment when it comes to trading revenues.
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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 8 October||Results|
|ICG Enterprise Trust (UK)||Q2|
|Tuesday 9 October||Results|
|Helen of Troy (US)||Q2|
|Wednesday 10 October||Results|
|Vertu Motors (UK)||Half-year|
|Thursday 11 October||Results|
|Commerce Bancshares (US)||Q3|
|N Brown Group (UK)||Half-year|
|Walgreens Boots Alliance (US)||Q4|
|WH Smith (UK)||Full-year|
|Friday 12 October||Results|
|First Republic Bank (US)||Q3|
|PNC Financial Services Group (US)||Q3|
|Wells Fargo (US)||Q3|
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