Monday 11 December
- First-half results from Begbies Traynor
- In the US, quarterly results from Oracle
Tuesday 12 December
- Full-year results from Chemring and RWS
- Trading statement from S&U
- UK unemployment and wage growth
- German ZEW economic sentiment survey
- US inflation
- US NFIB smaller companies business activity survey
- In Europe, quarterly results from Colruyt
- In the US, quarterly results from Johnson Controls
Wednesday 13 December
- UK construction, manufacturing and industrial output
- Japanese Tankan business confidence survey
- US producer price (factory gate) inflation
- US oil inventories
- In Europe, quarterly results from Inditex and Metro
- In the US, quarterly results from Adobe
- US Federal Reserve monetary policy decisions
The US Federal Reserve and the Bank of England will release monetary policy decisions on Wednesday and Thursday of this week, but expectations for drastic changes are low.
Entering the week, the expectations are for the Bank of England to retain its 5.25% base rate, while the Federal Reserve continues to stick at 5.5%. Both also have consistently cut back bond holdings, with the Fed cutting out $95bn each month from its peak of $8.9tr in summer 2022 and the Bank of England maintaining its goal to hit £680bn in assets, while the pot currently sits at £758bn.
Russ Mould, AJ Bell investment director, and Danni Hewson, AJ Bell head of financial analysis, said: “The outlook statements and how the balance of votes fall may therefore be more informative than the headlines.
“Despite protestations to the contrary, of varying degrees of vigour from both the Fed and the Bank of England, markets are already pricing in aggressive interest rate cuts for 2024, in the view inflation will continue to cool and economic growth will not prove too hot.”
Current predictions for rate cuts include four slashes in 2024 for the Bank of England, to reach 4.25% by this time next year. The Fed holds the same expectation of 4.25%, pricing in the five cuts with the first in March 2024.
“Yields on two-year Treasuries and two-year gilts seem to agree, again despite official protests,” Russ and Mould said.
“These yields have a history of moving some six to nine months before the central banks get around to it, so this may be a message worth heeding, even if the past is no guarantee for the future.”
Thursday 14 December
- Trading statements from Capita, Serco and SThree
- Interest rate decision from the European Central Bank
- Interest rate decision from the Swiss National Bank
- US retail sales
- US weekly initial unemployment claims
- In the US, quarterly results from CostCo
- Bank of England monetary policy decisions
- Bunzl fourth-quarter trading results
Bunzl will release its fourth-quarter trading statement this Thursday, with expectations for a relatively slow quarter despite a stable overall performance from the business.
In the third quarter, sales fell 8.8% year-on-year and 4.8% on a constant currency basis. Chief executive Frank van Zanten said the decrease was due to the lessening in stockpiling post-Covid and lower inflation rates. In addition, sales rose 18.8% for year-on-year in the previous fiscal year, a difficult rate to maintain.
“Bunzl’s business model is a solid one. It supplies the things that other firms need in order to do business, but not items they would sell to their customers,” Mould and Hewson said.
“For example, it supplies disposable coffee cups to cafes, food wrap to supermarkets, hard hats to builders, and cleaning materials, bandages and rubber gloves to hospitals. The required nature of the products it provides may shelter the firm from the vagaries of the economic cycle, at least to some degree, and also provide Bunzl with pricing power – a key ingredient during inflationary times.”
Expected sales for 2023 currently sit at £11.9bn, right behind 2022’s £12bn. Earlier this year, van Zaten changed his prospects of sales being “slightly higher” for this year compared to 2022 to “slightly lower”.
Across the business, hygiene enjoyed an increase of 2% while foodservice and retail dropped 4%. Grocery also experienced a 2% push. The UK represented the strongest region for the business, with a near 12% increase in underlying sales year-on-year.
“Bunzl is likely to leave any comment on dividends until the full-year results in February but do watch out for an update on acquisitions,” Mould and Hewson said.
“Bunzl has traditionally used bolt-on deals to supplement its organic growth and complement its business structure. The firm spent £322 million on 12 acquisitions in 2022 and it has already struck 14 deals in 2023, the last two of which were in Ireland and Brazil.”
Friday 15 December
- UK GfK consumer confidence
- Flash purchasing managers’ indices (PMIs) for manufacturing and services industries from the UK, Europe and US
- Chinese industrial production, retail sales and tangible fixed asset investment growth figures
- US industrial production and capacity utilisation rate
- In Europe, quarterly results from H&M
- In the US, quarterly results from Darden Restaurants