Standardiserad riskvarning: CFD-kontrakt är komplexa instrument som innebär stor risk för snabba förluster på grund av hävstången. 77 procent av alla icke-professionella kunder förlorar pengar på CFD-handel hos den här leverantören. Du bör tänka efter om du förstår hur CFD-kontrakt fungerar och om du har råd med den stora risk som finns för att du kommer att förlora dina pengar.

The Week Ahead: Fed minutes, US banks, Asos results

Read our pick of the top stories to look out for this week (11-15 October), and view our key company earnings schedule. 

Monday 11 October

Asos full-year results

The last few months have seen Asos’ share price roll over despite a good first-half trading update in April, and a decent Q3 update in July, which saw the shares drop sharply. The Asos share price is down over 40% year to date. Q3 total retail sales rose by 26%, with UK sales rising by 60%. For the four months to June, total revenue rose by 27% to just shy of £1.3bn. 

Having acquired the brands of Topshop, Topman, Miss Selfridge and HIIT for £265m in February, fully funded from cash reserves, the company now has a host of other brands to add to its catalogue, while the integration costs came in lower than expected. Although the business looks to have done well out of the various lockdowns, it appears that investors have lost confidence that this can continue, as the economy reopens and consumers are distracted by other activities. This view seemed to be supported by Boohoo’s numbers last month, and the fear is that it could impact Asos as well. Management don’t appear to be too concerned, leaving recent guidance unchanged, however this could change as a result of the various supply chain disruptions that are likely to get worse as we head towards Christmas. We’ve heard very little about the risks of higher costs and their impact, although Asos did acknowledge them back in July. The share price slide since then suggests that some of that may be already priced in. 


UK ILO unemployment rate (August) 

The unemployment picture for the UK economy has continued to improve over the last few months, a trend that has been no better illustrated than with the sharp decline in the claimant count rate since March, when it was at 7.2%. Since then, we’ve seen steady declines, falling to 5.7% in July, as businesses continue to reopen, even with the delayed UK reopening to 19 July. The ILO rate has fallen to 4.7%, even as furlough continues to roll off. With the various supply chain disruptions across sectors, it's becoming increasingly apparent that furlough has outlived its usefulness. Job vacancies in July rose to over 1m, with 182,000 new roles added as the UK economy reopened and the rest of the remaining restrictions were removed. Wages are also pushing higher, and while some of the gains can be put down to base effects caused by the pandemic, they still rose from 6.6% to 7.4%, excluding bonuses, which means they are still rising much faster than headline CPI inflation. This looks set to continue in the coming months, if the howls of anguish from businesses about labour shortages are in any way accurate. This could see the ILO measure edge higher, as struggling businesses decide to let any remaining employees go, suggesting that the next few months could be difficult ones for the labour market, especially where there are skills mismatches which result in delays in returning to the labour force.

Entain Q3 results

The recent $22bn bid by US betting giant DraftKings is a bold move for a company that appears to want to extend its market reach beyond the US. Putting to one side that Entain is still in the process of enacting its own programme of integrating various brands, the owner of Ladbrokes and Corals, and which was previously known as GVC Holdings, has been spreading out across the world at pace. The move by DraftKings is bold bearing in mind Entain’s relationship with MGM Resorts, and given that MGM made a bid earlier this year of $11bn. Entain certainly has a lot of assets, with a strong brand in the UK as well as its other 27 markets. MGM is highly unlikely to want to give up its designs on Entain, but if it does it may look to extract a high price from DraftKings. Either that, or it will have to decide whether it wants to even get close to the current offer, which is double its own offer. That’s a lot of bid inflation in less than a year, and raises the question whether the talks will amount to anything, and that’s before competition authorities get involved.


US Federal Reserve minutes 

The recent Federal Reserve statement came across as a neutral one, so it was somewhat of a surprise when Fed chair Jay Powell’s press conference was anything but. In its statement the Fed stated that “if progress continues broadly as expected, the committee judges a moderation in the pace of asset purchases may soon be warranted”. Nobody really expected this to mean November, but from the tone of Powell’s press conference later this appears to be what the FOMC wants us to think, despite there only being one non-farm payrolls report between now and the November meeting. 

While a taper seems pretty much nailed on, speculation has now shifted to the timing of the first interest rate increase. This is especially important given that the number of FOMC members who saw the potential for a rate rise in 2022 increased from seven in June, to nine, meaning the committee is evenly split. However, that is likely to change if the data evolves as expected, which means that a rate hike in 2022 is likely to become a majority view by the end of this year. This is a big shift in thinking from earlier in the year. 

Since that meeting, a lot of water has passed under the bridge: we’ve seen further sharp rises in the costs of energy, as well as supply chain disruption feeding into headline inflation. It’s clear the Fed is much more concerned about higher levels of inflation than they were a few months ago, and Wednesday’s minutes should give us an indication of how high this level of concern is. Bond markets certainly aren’t waiting to find out, with the yield curve steepening and short-term rates also rising sharply.

China trade balance (September) 

The August trade numbers for China were slightly better than expected, despite disruption at Chinese ports and the various lockdown restrictions that would have been expected to impact the flow of goods and services around the country. On the exports front there was also a pickup from 19.3% to 25.6%, driven by a rise in demand out of the US and EU, which appeared to come from retailers bringing forward their pre-Christmas order spend over concerns about supply chain disruption. Imports also proved to be slightly more resilient as well, rising 33.1%, however these numbers also need to be set in the context of a year ago. However, as we head into September, and the various power cuts and production shutdowns of China’s heavy industries during the month, there could be some weakness on the imports side. Exports might stay resilient though, as retailers continue to bring forward their pre-Christmas spend over struggling supply chain concerns. 

US CPI (September)

Are we getting any closer to peak CPI? If energy prices are any guide, then the answer is probably not, and there is increasing nervousness among central bankers about this very notion. While a rise in food and energy prices isn’t reflected in the Federal Reserve's preferred measure of inflation, the PCE deflator, it' s still causing sleepless nights for most central bankers as they look at pulling back on their stimulus programmes, at the same time as trying to keep their respective economies ticking over. In August, US CPI fell back from 5.4% in July to 5.3%, while core prices fell from 4.3% to 4%. A further fall would be most welcome, however given the continued resilience in energy prices and the disruption caused by Hurricane Ida, that may be more of a hope than an expectation.

JPMorgan Chase Q3 results 

At the end of June, JPMorgan Chase CEO Jamie Dimon went to great lengths to play down expectations for the bank’s Q2 earnings,  after a recording-breaking Q4 and Q1. With the bank also pledging to boost its quarterly dividend to $1 a share, having released another $5.2bn in loan loss reserves in Q1, investors seemed confident that more cash was likely to come their way. In Q2, the bank released a further $3bn from reserves, delivering another decent quarter. Revenue came in at $30.4bn, while profit came in at $3.75 a share, both decent beats on market expectations. On the fixed-income side, revenue came in below expectations at $4.1bn, however in other areas of the business the performance was really strong, pointing to a bank that doesn’t appear to have a weak link. Loan growth continues to be a concern, with CFO Jeremy Barnum saying at the time it was unlikely to improve this year. This likely continued in the latest quarter, given disruptions caused by the delta variant in July and August, with both companies and consumers reluctant to borrow, while deposits rose by 23%. Costs are also likely to be a key area, especially since they rose to $71bn in Q2. It's unlikely that Q3 profit will be able to match the levels seen in Q1 or Q2, unless the bank decides it wants to release more reserves. Profit is expected to come in at $2.89 a share.

Delta Air Lines Q3 results  

Having posted a $1.2bn loss at the end Q1, the airline returned to a profit of $652m in Q2, when it reported back in July, largely due to help on the payrolls front from the Federal government, and a recovery in domestic demand. If that aid is stripped out, losses were $1.07 a share, on revenues of $7.13bn. The airline said that it expected to be profitable through the second half of the year without that help. For Q3 Delta said it expected to see revenue fall between 30% to 35% from 2019 levels, when it made $12.5bn. Since then, the picture has changed. At the beginning of September, United, Southwest and American Airlines downgraded their Q3 guidance after August bookings came in at the lower end of expectations, with business travel also underperforming. While Delta said that it expected revenues to take a hit, it still expected to be able to turn a small profit The slowdown in bookings is expected to continue into Q4 as well, and despite the resumption of international travel between the UK, Europe and the US, the US domestic market is still a big revenue earner for all of the US airlines. Profits are expected to come in at $0.18 a share.  


Citigroup Q3 results 

Continuing a theme, the release of $2.4bn in loan loss reserves helped boost Citigroup's Q2 profits to $2.85 a share, beating expectations of $2 a share, while revenues rose to $17.47bn. The patterns for revenue and profitability by division were similar to its peers, with FICC underperforming, and equities and trading doing better than expected. In retail banking, revenue was 7% lower as consumers paid down debt, while deposits rose by 18% as consumers cashed in their stimulus payments. There was some disappointment that Citigroup was one of the few banks not to announce a dividend payout increase, and this quarter's upcoming Q3 numbers seem likely to bring a further quarter-on-quarter decrease, with profits set to come in at $1.82 a share.


US retail sales (September) 

US retail sales confounded expectations in August. With most predictions expecting a fall of roughly -0.7% in line with weaker consumer confidence, the reported rise of 0.7% was a surprise, although a revised July reading of -1.8% tempered some of the positive narrative. Recent earnings reports from US retailers suggest that consumer spending has been rather subdued, with significant disruption from Hurricane Ida likely to have played a part. When we take into account a poor jobs report in August, and the expiration of various unemployment fiscal support measures, there is a chance we could see a weak September number, with expectations of a -0.2% decline.   

Goldman Sachs Q3 results 

Goldman Sachs also had a decent Q2, with revenues coming in at $15.39bn, well above expectations of $12.43bn. However, trading revenue fell short at $4.9bn, and could continue to struggle in Q3 given the low levels of turnover during the summer months. This was more than offset by investment banking revenue which rose 26% to $3.45bn, boosted by the high number of IPOs. Consumer and wealth management, which was expanded to the general public at the beginning of this year, generated a record $1.75bn in revenue in Q2. Profits came in at $15.02 a share, well above consensus of $10. Operating expenses were more than 17% lower than a year ago, coming in at $8.64bn, and also lower than they were in Q1. Compared to JPMorgan, Goldman seems to have a better handle on costs, but that’s to be expected as they have fewer bank branches and only a nascent retail operation. Q3 profits are expected to be below Q2 levels and could come in under $10 a share, possibly around $9.77. 

Index dividend schedule

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

Selected company results

Monday 11 October Results
Asos (UK) Full-year
Entain (UK) Q3
Fastenal (US) Q3
OnTheMarket (UK) Half-year
Pinnacle Financial Partners (US) Q3
SMART Global (US) Q4
Tuesday 12 October Results
Delta Air Lines (US) Q3
E2open Parent (US) Q2
JPMorgan Chase (US) Q3
Oil-Dri Corp of America (US) Q4
Wednesday 13 October Results
Alcoa (US) Q3
Bank of America (US) Q3
Citigroup (US) Q3
Commercial Metals (US) Q4
Duck Creek Technologies (US) Q4
Morgan Stanley (US) Q3
Progressive (US) Q3
UnitedHealth (US) Q3
US Bancorp (US) Q3
Walgreen Boots Alliance (US) Q4
Thursday 14 October Results
Goldman Sachs (US) Q3
PNC Financial Services (US) Q3
Sensient Technologies (US) Q3
Truist Financial (US) Q3
Friday 15 October Results
No major announcements  

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

CMC Markets erbjuder sin tjänst som ”execution only”. Detta material (antingen uttryckt eller inte) är endast för allmän information och tar inte hänsyn till dina personliga omständigheter eller mål. Ingenting i detta material är (eller bör anses vara) finansiella, investeringar eller andra råd som beroende bör läggas på. Inget yttrande i materialet utgör en rekommendation från CMC Markets eller författaren om en viss investering, säkerhet, transaktion eller investeringsstrategi. Detta innehåll har inte skapats i enlighet med de regler som finns för oberoende investeringsrådgivning. Även om vi inte uttryckligen hindras från att handla innan vi har tillhandhållit detta innehåll försöker vi inte dra nytta av det innan det sprids.