Monday 10 July
- Chinese inflation figures
- In Asia, monthly sales figures from Taiwan Semiconductor Manufacturing Company (TMSC), the world’s leading silicon chip foundry
Tuesday 11 July
- Full-year results from Begbies Traynor
- US smaller companies’ sentiment survey
US inflation fell to 4.1%, in May, its lowest level since April 2021, while the producer price index also cooled significantly. These statistics informed the Fed’s decision to keep interest rates at 5.25% in June.
However, AJ Bell investment director Russ Mould and head of analysis Danni Hewson point towards the release of the American NFIB Business Optimism Survey on Tuesday as another key statistic for investors.
The survey asks smaller companies for their perspective on the world. Over 33 million businesses in America employ less than 500 people and their staff represent 99% of the total US workforce, so it provides an insight into a key component of the US economy.
They said: “There now seems to be a gathering consensus that the US economy may suffer no landing at all, let alone a soft or a hard one, and defy the pessimists by continuing to grow. Such a view seems to be helping headline US indices such as the S&P 500 forge a new bull-market run.
“The bad news, therefore, is the last NFIB reading was 89.4. That was the lowest score since January 2013 – lower even than the levels seen during 2020’s pandemic panic. A drop below 95 heralded the recessions of 1990, 2007 and 2020 while the NFIB indicator got to 96 ahead of the 2001-02 downturn. The only false signal given so far came in 2016.
“US small-cap stocks are reflecting this apparent unease. The Russell 2000 small-cap stock index is still down by 22% from its high and remains stuck in bear-market territory, as defined by a one-fifth drop from its previous zenith.”
They added: “An upturn in the US NFIB survey and Russell 2000 would be a potentially encouraging indicator for any investor who is looking for further gains from US equities, where 2023’s gains are, thus far, relying on a tiny number of stocks.
“Narrow breadth is often seen as a negative sign, not a positive one, and US equity market breadth is very narrow indeed as the ‘Magnificent Seven’ of Amazon, Alphabet, Apple, Microsoft, Meta, NVIDIA and Tesla are responsible for nearly all of its gains, at least in market capitalisation terms.”
- Trading statements from Grafton, Dechra Pharmaceuticals and Galliford Try
- UK unemployment, job vacancies and wage growth data
- German ZEW economic sentiment survey
- In Europe, quarterly results from Kinnevik and Nordic Semiconductor
Wednesday 12 July
- Full-year results from Sosandar, Loungers and Renold
- Trading statements from Pagegroup, JD Wetherspoon and Tullow Oil
- Interest rate decision from the Reserve Bank of New Zealand and the Bank of Canada
- US consumer price inflation (CPI) figures
- US Federal Reserve Beige Book
- US oil inventories
Thursday 13 July
- Trading statements from Experian, Wood Group and Watches of Switzerland
- Barratt Developments full-year update
UK housebuilder Barratt Developments is set to release a trading update on Thursday, ahead of its results for the full year on 6 September.
The firm’s share price has more than halved since its pre-pandemic peak, which Mould and Hewson attribute to worries over higher interest rates, mortgage availability, housing affordability, input cost pressures and an end to government support schemes such as the stamp duty tax break and Help to Buy.
Aarin Chiekrie, Hargreaves Lansdown equity analyst, added: “Next week’s trading statement will give an early peek into Barratt Developments’ full-year performance. Analysts could expect to see that lower reservation rates across last year led to a slowdown in the number of completions. But the pullback on construction and land spend should have helped the group’s net cash position to rise from the £600m seen in May, to a mammoth £900m.
“Barratt’s already guided for pre-tax profits to land in at around £877m, down from £1.1bn in the prior year. This comes with the backdrop of higher selling charges and elevated build cost inflation, the latter of which ran hot at 9-10%, which have both acted to squeeze margins. Build cost inflation was expected to ease to around 5% this year, and investors are keen to hear if there’s been any change on this front in next week’s update.”
- UK GDP growth
- UK manufacturing, industrial and construction output data
- US producer price (factory gate) inflation figures
- US weekly initial unemployment claims
- In Japan, quarterly results from Fast Retailing
- In the US, quarterly results from PepsiCo, Fastenal, Delta Air Lines and Conagra
Friday 14 July
- Trading statements from Liontrust Asset Management and Ashmore
- Burberry Q1 trading update
On Friday, Burberry will reveal its results for the first quarter. The luxury fashion house’s shares are up by a quarter in the past year, partly due to the reopening in China after three years of lockdowns, as the country is a big consumer of luxury goods. However, recently the price has fallen.
AJ Bell’s Mould and Hewson said the recent share price slide may be China-related as well, “given how the country’s economy does not seem to be picking up steam as quickly as many had hoped”.
Susannah Streeter, Hargreaves Lansdown head of money and markets, said: “Investors’ enthusiasm for Burberry has waned as China’s pandemic snap-back has showed signs of fizzling out. The company relies heavily on the region and, although there had been a rebound in sales as Covid restrictions eased, evidence of an economic slowdown has seen its share price retreat sharply since April’s highs.
“Although the company had maintained existing guidance for the year, investors will be eager to find out if current economic uncertainty will cloud the outlook. However, Burberry’s core customers do usually have wealthy layers of protection from slowdowns and keeping the brand in favour with demanding fashionistas is much more important. It’s been paying off so far with Burberrys’ all important leather bags and coats selling well, a trend which will be closely watched for any signs of weakness.’’
- In Europe, quarterly results from BlackRock
