Our Chief Market Analysts Michael Hewson assess this week's major market events.
See the week ahead video, the top events to watch, plus our key company earnings schedule. Michael looks at the recent weakness in equity markets and whether we could see further declines. He also looks ahead to the latest ECB and Bank of England rate meetings, and latest Chinese data.
JD Sports H1 results
Tuesday: It’s been a tough year for UK retail so far with several restructurings and profit warnings from multiple well-known retail brands. Earlier this year, JD Sports surprised a few people by expanding into the US market with the £400m acquisition of Finish Line, a company that is a key supplier to Macy’s department store. This may have been a smart move, based on US consumer spending so far this year. However, the strains on US consumers’ wallets aren’t dissimilar to those faced by UK consumers, which means JD Sports is just as vulnerable as its US counterparts to the online threats posed by companies like Amazon. That said, £400m seems a small price to pay to access one of the world’s largest leisure markets. This week we’ll get an early indication of the company’s performance, not only at home, but also in its international markets.
UK unemployment & wages, BoE rate announcement
Tuesday & Thursday: UK policymakers will assess recent weakness evidenced in the August PMI data this week. Thursday’s announcement comes against a backdrop of speculation about Bank of England governor Mark Carney’s future, as well as last month’s rate rise. While no interest-rate changes are expected, the main focus will be on Tuesday’s latest wages and unemployment data for the three months to July. Wage growth (excluding bonuses) has remained steady at 2.7%, down from 2.9% in March, while unemployment edged slightly higher to 4%, but is still near multi-year lows. Policymakers will be looking for wage growth to remain steady, or even to edge back up again, in order to justify last month’s decision to raise rates.
Dunelm Group full-year results
Wednesday: Earlier this year, Dunelm Group issued a profit warning as a decline in footfall saw group sales drop by 1.4% in its latest quarter, led by a 4.6% fall in store sales. While most of this was offset by a big jump in online sales, it nonetheless raised concerns about the sustainability of margins across the entire business, as retailers continue to struggle in a challenging environment. Losses on two recently acquired businesses have also weighed on profits, with investors hoping that summer writedowns are the final word when it comes to integrating Worldstores.co.uk and Kiddicare.com into the business model.
Apple: new iPhone launch event
Wednesday: There’s been much speculation in the last few weeks about the next range of product upgrades from Apple, as management seek to maintain expectations about the company’s ability to sustain its position as a cash machine. It’s slowly losing its global share in the mobile phone market to Samsung and Huawei. This shouldn’t be too much of a surprise with the next areas for growth likely to be in places like India, where consumers will be more price sensitive. This week we’ll probably see an upgrade to the £1k iPhone X, with the release of the iPhone XS. There should also be enhancements to the iPhone 8 as well as a new Apple Watch, along with some improvements to the various tablet versions, although the iPad mini could be on borrowed time given it hasn’t been upgraded since 2015.
ECB rate meeting
Thursday: At its last meeting in July, European Central Bank (ECB) officials confirmed they remained on course to exit the asset purchase programme by the end of this year, while also stating that rates were unlikely to rise before the end of summer 2019. Following some conjecture, ECB president Mario Draghi asserted it meant towards the end of Q3 next year. At this week’s meeting, the ECB is likely to announce that it remains on course to begin the tapering process at the end of the month, despite current evidence that inflation remains subdued. It will also update its latest economic projections against a backdrop of rising concerns about the imposition of tariff barriers on some areas of the European economy.
China industrial production & retail sales (August)
Friday: Some of the most recent economic data out of China has been rather mixed, but has been showing signs that the world’s second biggest economy is slowing. Retail sales growth has dipped sharply in the last three months from levels seen at the beginning of the year, when it was around 10%. Industrial production has also been similarly weak, though it hasn’t fallen below the 6% level last witnessed in 2015, when there were similar concerns about a sharp slowdown in the Chinese economy. More worryingly, fixed-asset investment also slowed last month to multi-year lows of 5.5%. Against a backdrop of rising trade tensions, further weakness could signal more turmoil in emerging markets.
US retail sales (August)
Friday: The US consumer has been remarkably resilient over the last few months, with retail sales showing some decent gains in the last two quarters. This week’s numbers look set to show a similar pattern for the sixth month in succession. The tax cuts announced at the beginning of the year still appear to be trickling down into the US economy, though there are warning signs, such as home sales starting to slow. For an economy that is quite sensitive to the vagaries of the housing market, falling property values could indicate early signs of a slowdown in consumer spending.
Index dividend schedule
Dividend payments from an index's constituent shares can affect your trading account. See this week's details
Selected UK & US company announcements
|Monday 10 September||Results|
|Applied Genetic Technologies (US)||Q4|
|Destination Maternity (US)||Q2|
|Gulf Keystone Petroleum (UK)||Half-year|
|Hovnanian Enterprises (US)||Q3|
|Investors Real Estate Trust (US)||Q1|
|Matrix Service (US)||Q4|
|Tuesday 11 September||Results|
|Francesca's Holdings (US)||Q2|
|Ashtead Group (UK)||Q1|
|Cairn Energy (UK)||Half-year|
|Hilton Food Group (UK)||Half-year|
|JD Sports Fashion (UK)||Half-year|
|Vectura Group (UK)||Half-year|
|Wednesday 12 September||Results|
|Advanced Medical Solutions (UK)||Half-year|
|Dunelm Group (UK)||Full-year|
|Galliford Try (UK)||Full-year|
|Oxford Industries (US)||Q2|
|Science Applications International (US)||Q2|
|Tailored Brands (US)||Q2|
|Thursday 13 September||Results|
|Adobe Systems (US)||Q3|
|Ophir Energy (UK)||Half-year|
|Oxford Biomedica (UK)||Half-year|
|Wm Morrison Supermarkets (UK)||Half-year|
|Friday 14 September||Results|
|Dave & Buster's Entertainment (US)||Q2|
|J D Wetherspoon (UK)||Full-year|
Company announcements are subject to change. All the events listed above were correct at the time of writing.
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