Monday 9 January
- – Chinese inflation data
- – German industrial production
- – In the US, quarterly results from Albertsons
Tuesday 10 January
- – Full-year results from Shoe Zone
- – First-half results from Games Workshop
- – Trading statement from RS Group and Robert Walters
- – British Retail Consortium retail sales figures
- – US NFIB Small Business index
Wednesday 11 January
- – Trading statements from Barratt Development, Topps Tiles, Pagegroup, Grafton and J Sainsbury
- – US oil inventories
- – In Asia, quarterly results from Taiwan Semiconductor Manufacturing Company (TSMC)
Thursday 12 January
- – Trading statement from Persimmon
Persimmon’s trading report follows hot on the heels of fellow house builder Barratt Developments, both of which have endured a difficult 12 months. The latter’s shares have all but halved over the last year, a drop that AJ Bell’s Russ Mould and Danni Hewson attribute to rising input costs, high interest rates, the end of Help to Buy, lower mortgage availability last autumn, and sagging consumer sentiment.
Persimmon has experienced a similarly sharp drop in its share price over the last year, and Hargreaves Lansdown’s head of equity funds, Steve Clayton, noted that its last update revealed a slower pace of reservations at development sites. He put this down to consumers mulling how rising interest rates and the rapidly increasing cost of living would impact them.
Clayton said: “The job market remains pretty tight, reducing the prospects of an offsetting reduction in pressure from the operating costs side of the business. Persimmon tightened their distribution policy earlier in 2022 and investors will be nervously awaiting any further comments.”
However, he added that markets tend to price in expectations, and that the challenges facing the company were expected. So, he said, how the stock moves on the day will be very dependent on the mood music surrounding the data.
Clayton concluded: “If the company can show confidence in maintaining their margins, then that news could be well received. But with Barratt providing an update on general housing market conditions the day before, we expect that the reaction on the day itself is likely to be muted.”
- – Trading statements from Tesco and Marks & Spencer
Christmas is a crucial period for supermarkets and retailers, so investors will be keen to assess how these companies have performed during the festive period, especially during a cost of living crisis.
According to Hargreaves Lansdown’s Sophie Lund-Yates, investors will be keeping a close eye on whether Tesco was forced to steepen discounts to attract and retain customers. If so, she said, profit expectations may be tempered.
“This is an existing challenge for Tesco. We heard at the half year that despite higher sales, underlying operating profit fell 9.8% to £1.3bn, as inflation pushed costs higher and consumers shifted to own-brand items.
“To Tesco’s credit, its huge scale and hard work on positioning itself as a better-value offering should stop any dramatic shifts. As one of the first, and arguably better-run, retail giants reporting Christmas results, [their] numbers will be taken as a bellwether for the wider industry.”
Susannah Streeter, senior investments and markets analyst at Hargreaves Lansdown, said M&S is not immune to the cost of living crisis, but it has a different proposition to the other big grocers, and its classic customer is unlikely to stop shopping at its stores solely because of inflationary pressures.
“Rail strikes might have reduced trade at its convenience stores across the transport network, but its retail park locations are likely to have stayed resilient. There will be a keen eye trained on progress in the company’s shift away from under-performing stores in high streets to these out-of-town locations where food is prioritised, with click and collect services alongside. This strategy seems to be paying off and is likely to be accelerated.”
- – Trading statements from ASOS, DFS Furniture, Halfords, John Wood and Dechra Pharmaceuticals
- – US weekly unemployment claims
- – US inflation figures
Inflation was one of the biggest macroeconomic themes of 2022, so investors will be keeping a keen eye on the US inflation figures on Thursday. AJ Bells’ Mould and Hewson, said that if inflation does slow, as many politicians and central bankers are hoping, then a pause on rate rises, and a pivot to rate cuts, will benefit bond and share prices.
They added: “Only time will tell, but it does seem perfectly possible that the rate of headline inflation slows in the first half of 2023, because inflation readings are compiled as an index and the base for comparisons are stiff in the early stages of the year. In addition, oil is no higher than it was a year ago.”
Mould and Hewson argued, however, that the real test could come in the second half of 2023 when the base for comparison softens. If wage growth continues strongly and if oil and energy prices increase in H2 2023, the pair said the chances of inflation getting back to 2% would look slim, and central bankers would then face the risk of cutting rates and jump-starting the economy too early.
- – In Europe, quarterly results from Christian Hansen
Friday 13 January
- – First-half results from MJ Gleeson
- – Trading statement from Taylor Wimpey
- – UK monthly GDP
- – UK monthly manufacturing, construction and industrial output data
- – EU industrial production
- – In the US, quarterly results from JP Morgan Chase, Wells Fargo, Blackrock, Citigroup, Bank of New York Mellon and Delta Air Lines
