Weekly outlook: ECB could extend €1.4trn recovery fund; UK retail sales data; Ashtead and Marston’s report

The key events for UK wealth managers for the week starting 7 December

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Monday 7 December 

-H1 results from British retailer Ted Baker 

 Halifax UK house price index 

-Quarterly results from US housebuilder Toll Brothers  

Tuesday 8 December 

-British Retail Consortium sales data 

Last month, footfall at Britain’s shops dropped 32 percentage points from October and 65% compared with a year ago as England locked down for the second time this year. 

-Ashtead H1 results 

The Share Centre notes the equipment hire group has performed “comfortably ahead of the market, with shares doubling since their March lows to £32.21, which it says is partly down to the firm being classified as an essential business and thus carrying on as normal during lockdown.  

AJ Bell investment director Russ Mould reckons the fact Ashtead gets 90% of its sales from its American Sunbelt operation could also explain the share price optimism as investors bank on a faster US recovery. 

Sales, pre-tax profit and the dividend are the three headline figures analysts will zero in on, Mould says. 

-Cyber security GB Group H1 results and trading statement from Ferguson 

-Japanese wage growth data 

-German ZEW economic sentiment survey 

-US NFIB smaller companies survey 

-In the US, online retailer Chewy and spirits and wine business Brown-Forman release quarterly results 

Wednesday 9 December 

-Infrastructure group Balfour Beatty reports 

-British American Tobacco trading update 

Though BAT is usually lauded for its defensive qualities during times of market stress, concerns about stricter regulation in certain markets, especially for its all-important next-gen products, have weighed on shares this year, The Share Centre said. 

“BAT’s next generation product sales grew 13% in the first half, and the market will be keen to see if that continued in the second half despite the continued Covid-19 restrictions. 

 Chinese inflation figures 

-Bank of Canada interest rate decision 

US job openings and labour turnover survey (Jolts) 

US oil inventories data 

-Quarterly results from Adobe, Slack, Campbell’s Soup and PPE supplier Top Glove in the US 

Thursday 10 December 

-Full year results from Marston’s and Ocado 

Online grocery retailer Ocado and pub and restaurant chain Marston’s have faced very different realities during the global pandemic. The former has benefited from a surge in home grocery deliveries and which has seen its full-year guidance steadily rise to £60m. Meanwhile, Marston’s trading update from October showed group sales for the year were on track to plunge 30% to £821m. 

“As we emerge from the UK’s second national lockdown in November, the focus will fall on the outlook over the short term and how difficult the past month may have made the company’s plans on cutting back on its relatively high debt level,” The Share Centre said.  

-H1 results FirstGroup and DS Smith 

-ECB policy meeting  

Mould notes that president Christine Lagarde “dropped some pretty heavy hints” at the October meeting the ECB would expand its now €1.4trn Pandemic Emergency Protection Programme (PEPP) a second time. 

Economists are predicting another €500bn could be added by Europe’s central bank, despite its swollen €6.9trn balance sheet, which has ballooned by 45% since the start of 2020. 

“The ECB’s balance sheet therefore equates to around 40% of GDP, compared to around 33% for the Federal Reserve’s assets relative to the US economy and 45% in the UK for the Bank of England’s asset base,” Mould notes.  

“It is also way less than the Bank of Japan’s balance sheet which now carries assets valued at more than 100% of Japanese GDP, to suggest the ECB (and other Western central banks) could keep on increasing QE and creating more money for a long time to come, if they wished. Whether that is actually a good idea or not remains to be seen.” 

-UK manufacturing, construction and industrial output data 

-US inflation figures 

-US Federal monthly budget balance 

-Oracle, Costco, Broadcom, Lululemon and Ciena report in the US 

Friday 11 December 

-Trading statements from Rolls-Royce and house builder Bellway 

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