Weekly outlook: Facebook, Apple and Shell report; ECB and BoJ policy meetings

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22 October 2021

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Portfolio Adviser

Monday 25 October

-FCA policy statement: A new authorised fund regime for investing in long-term assets

-Quarterly results from HSBC

-Chinese Q3 GDP growth

-German Ifo business climate survey

-Belgian Courbe Synthetique business confidence survey

-In Europe, quarterly results from Swedish steelmaker SSAB

-In the US, quarterly results from Facebook and Kimberly-Clark

Hargreaves Lansdown equity analyst Nicholas Hyett said: “The regulatory and reputational heat on Facebook has been increasing in the last quarter. Facebook, Instagram and WhatsApp faced a major outage in early October, the group was accused of covering up research suggesting its products are bad for users’ mental health and WhatsApp was fined for incorrect use of customer data. All in all, a pretty horrible set of headlines.

“The question is whether the bad news has had much impact on users. The group’s no stranger to bad press, and that hasn’t stopped daily user’s rising 79% in just two years. Advertisers too seem to be willing to overlook bad press to access Facebook’s audience, with average revenue per user up 43.5% in just one year. Management will hope this latest round of negative headlines is no different.”

Tuesday 26 October

-First-half results from Whitbread

-Trading update from Reckitt Benckiser

Hyett said: “Rising input costs are expected to eat into Reckitt’s profit margins in the second half. With volume growth also somewhat lacklustre at the half year, the group has its work cut out. Part of the challenge the group faces is the very strong results reported in 2020 – as coronavirus concerns drove uptake of its health and hygiene products. That will remain the case in the second half, and in all honesty, we would view flat numbers as a positive result in products like Dettol and Lysol.”

-Trading updates from Bunzl, and FTSE 100 gold miner Polymetal

-US Case-Shiller house price index

-US Conference Board consumer confidence

-US new home sales

-In Europe, quarterly results from Novartis, UBS and SKF

-In the US, quarterly results from Alphabet, Visa, Texas Instruments, UPS, General Electric, 3M, Lockheed Martin, Twitter, Teradyne and Hasbro

Wednesday 27 October

-Quarterly results from GlaxoSmithKline

–Trading updates from Evraz, Fresnillo, AVEVA and ContourGlobal

-Chancellor Rishi Sunak delivers the autumn budget

-EU money supply figures

-US durable goods orders

-US oil inventories

-In Asia, quarterly results from UMC

-In Europe, quarterly results from BASF, Iberdrola, Banco Santander, Heineken, Deutsche Bank, Swedish Match, Sodexo

-In the US, quarterly results from Microsoft, Coca-Cola, McDonald’s, AMD, Boeing, Ford, KLA Corp, Spotify, Kraft-Heinz, Xilinx

Thursday 28 October

-European Central Bank policy meeting

AJ Bell investment director Russ Mould and financial analyst Danni Hewson said the European Central Bank’s headline refinancing rate has stood at zero since March 2016 but at its last meeting in September president Christine Lagarde seemed to announced a tapering of QE, even if she said it was nothing of the sort.

“The ECB announced it would slow the pace of its monthly Pandemic Emergency Protection Programme (or PEPP) to between €60bn and €70bn a month, from the prior run rate of €80bn, even if the goal was still to inject total stimulus of €1.85trn into the system between March 2020 and March 2022. Total ECB assets are still growing and now stand at €8.3trn, up 24% year-on-year.”

-Bank of Japan policy meeting

Mould and Hewson noted that Japan has held interest rates at -0.1% since February 2016 and has been running QE at an official rate of ¥80trn (more than £500bn) a year. However, the BoJ has actually been tapering QE almost by stealth and following the departure from office of prime minister Shinzo Abe a year ago the assets on its balance sheet have stopped growing.

“It will be intriguing to see if governor Haruhiko Kuroda makes this is a more formal policy and whether this is a genuine attempt to taper, rein in QE and tighten policy, rather than just let it run less loosely.”

-Royal Dutch Shell Q3 results

Shares in Shell are up by some 80% over the past year, fired by a rebound in oil and gas prices, said Mould and Hewson, and analysts will be looking at pre-tax profit in a current cost of supplies (CCS) basis, as well as the business mix or the split between exploration and production, refining and marketing, chemicals, and integrated gas.

-Apple Q4 results

Apple racked up its best third quarter ever between April and June, with sales of $81.4bn and earnings per share of $1.30, and has since released the iPhone 13, a new iPad and extra ranges of accessories – so the and so the stage is set for another strong quarter, said Mould and Hewson.

They said analysts have already pencilled in sales of $85bn, a 31% increase on Q4 a year ago, and an EPS of $1.24, compared to $0.73 a year ago.

-Trading statements from WPP, Lloyds, JD Sports Fashion, DS Smith, C&C Group and Hunting

-UK Nationwide house price survey

-US Q3 GDP growth figures

-US weekly unemployment claims

-In Japan, quarterly results from Sony

-In Asia, quarterly results from Budweiser Brewing APAC, Samsung Electronics, Baidu, SK Hynix

-In Europe, quarterly results from Volkswagen, Sanofi, TotalEnergies, Anheuser Busch InBev, Airbus, STMicroelectronics, Kone, Nokia, Beiersdorf, Carlsberg and Stellantis

-In the US, quarterly results from Amazon, Comcast, Shopify, Starbuck’s, Caterpillar, Newmont Corp, Hershey and Yum! Brands