Market Analyst, David Madden, provides his thoughts and analysis on this week's market events.
View his week ahead video, the top stories for this week, plus our key company earnings schedule.
Ashtead Q4 results
Tuesday: The share price has recently retreated from yet another all-time high, which gives an indication of how well Ashtead is doing. The British-headquartered company makes the bulk of its revenue in the US, and the clean-up operations following hurricanes Harvey, Irma and Maria last year helped to boost revenue. In March, the company announced that nine-month sales and profits were up 21% and 24% respectively. Ashtead hasn’t raised its outlook, complaining about the weakness in the US dollar, but since then the greenback has rallied and this should assist the fourth-quarter numbers.
US housing reports
Tuesday & Wednesday: The US will release the latest building permits, housing starts and existing home sales reports this week. The housing market has experienced a small slowdown, but by-and-large all these indicators are relatively close to multi-year highs. Housing demand is clearly strong and in the grand scheme of things interest rates are at rock-bottom levels. The Federal Reserve is continuing down the path of monetary tightening, but so far it hasn’t dampened demand for housing.
Berkeley Group full-year figures
Wednesday: In December 2017 Berkeley Group set an aggressive target to make £3.3 billion in pre-tax profit between then and 2021. Revenue and profit are rising and the firm is confident that it will achieve its ambitious goal. The homebuilder warned that rising costs, limits on mortgage sizes, and economic uncertainty could hamper growth rates. But the share price recently reached another all-time high, highlighting the bullish investor sentiment.
SNB financial stability report and meeting
Thursday: The Swiss National Bank (SNB) is tipped to keep interest rates unchanged at -0.75%, the level they have been at since early 2015. The inflation rate recently hit 1%, its highest since March 2011. This aggressive policy of having negative interest rates for several years has helped push inflation up to multi-year highs. Earlier this month the SNB chief, Thomas Jordan, announced it was still ‘too early’ to consider hiking rates. Italy’s decision to pledge itself to the euro will add stability to the Swiss franc, as safe-haven currencies won’t be as sought out.
Bank of England meeting
Thursday: The UK central bank is expected to keep rates on hold at 0.5% and the asset purchase scheme unchanged at £435 billion. At the meeting in May, MPC members Michael Saunders and Ian McCafferty voted to hike rates by 0.25%, but the remaining seven members voted to keep policy unchanged. The outlook issued by the BoE last month was a little subdued, as the growth forecast for 2018 and 2019 were lowered. The latest average earnings showed a cooling in the growth rate, and this is likely to play on central bankers’ minds, as they would prefer to see firmer wages before raising rates again.
Thursday & Friday: Opec members will meet in Vienna this week to formulate a policy for the near term. Opec and Russia have an agreement to keep production frozen until the end of 2018, and oil has rallied this year as a result, hitting a 42-month high in May after the US decided to reimpose sanctions on Iran. The US asked Saudi Arabia to raise its output to offset the situation in Iran, and there is talk that Saudi Arabia and Russia are keen to ease up on the production freeze agreement.
Eurozone flash manufacturing and services PMI
Friday: The eurozone is due to announce the flash manufacturing and services PMI reports for June. The currency bloc has been going through an economic soft patch, so these figures will be closely watched given that the two industries account for a large amount of the economic output in the region. The latest industrial production reports from Italy, France and Germany all point to an economic cooling. Indicators like these could provide important guidance around speculation that the European Central Bank will wind down its bond buying scheme this year. Some stability has returned to the single currency in light of Italy confirming it has no intention of dropping the euro.
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See this week's details
Monday 18 June Results
No major US or UK companies reporting
Tuesday 19 June Results
Ashtead (UK) Q4
FedEx (US) Q4
La-Z-Boy (US) Q4
Oracle (US) Q4
Telecom Plus (UK) Full-year
Wednesday 20 June Results
Actuant (US) Q3
American Outdoor Brands (US) Q4
Barnes & Noble Education (US) Q4
Berkeley Group (UK) Full-year
Micron Technology (US) Q3
Severfield (UK) Full-year
SYNNEX (US) Q2
Winnebago Industries (US) Q3
Thursday 21 June Results
Barnes & Noble (US) Q4
Commercial Metals (US) Q3
Darden Restaurants (US) Q4
Finish Line (US) Q1
Kroger (US) Q1
Methode Electronics (US) Q4
Patterson Companies (US) Q4
Red Hat (US) Q1
Friday 22 June Results
Carmax (US) Q1
Company announcements are subject to change. All the events listed above were correct at the time of writing.
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