Weekly outlook: UK consumer confidence data and Netflix reports

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15 October 2023

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Portfolio Adviser

Monday 16 October

Trading statements from Rio Tinto
Rightmove UK house price index

Tuesday 17 October

Full-year results from Bellway
Trading statement from Vanquis Banking
Chinese growth in retail sales, industrial production and tangible fixed asset investment
German ZEW economic sentiment survey
US retail sales
UK unemployment data
US industrial production and capacity utilisation rates
US NAHB housebuilders’ survey
In Australia, a trading statement from BHP
In Europe, quarterly results from LM Ericsson and Nordic Semiconductor
In the US, quarterly results from Johnson & Johnson, Bank of America, Lockheed Martin, Goldman Sachs, BNY Mellon, Omnicom, United Airlines and Albertsons

Wednesday 18 October

Full-year results from Revolution Bars
Trading statements from SEGRO, Antofagasta, Barratt Developments, Quilter and RHI Magnesita
Chinese monthly growth figures for retail sales, industrial output and tangible fixed asset investment
EU inflation
Whitbread half-year results

On Wednesday, FTSE 100 member Whitbread will post its first-half results. Shares in the hospitality firm are up by roughly a third in the last 12 months.

Susannah Streeter, Hargreaves Lansdown lead equity analyst said: “Whitbread has expressed confidence for the year ahead and, with a strong first quarter under the belt, optimism about the half year is relatively buoyant. In the first three months, the Premier Inn owner saw sales growth surge by 15%, helped by the average costs of rooms being pushed up. For now, customers are happy to swallow the price increases, and demand for accommodation is ticking along nicely.

“However, concerns are lingering that cost-of-living pressures could start weighing more heavily on appetites to spend and that’s been affecting the share price. So, investors will be keeping a keen eye on future guidance, particularly for the food offering which has shown signs of weakness. However, demand is expected to stay relatively strong, which should be helped by a shift in focus to business travellers, as firms under pressure to keep budgets down may choose the value Premier Inn is reputed to offer, rather than higher-end chains.

“That said, the resilience of the consumer when it comes to desires for mini-breaks and longer trips away is showing signs of continuing. The latest credit card data form Barclaycard showed sales in the travel sector surged by 13.2% year on year in September, as spending on experiences like holidays is ringfenced. If Whitbread can reproduce Premier Inn’s success in Germany, this is potentially a bigger growth opportunity so any signs of progress in it has a much smaller footprint here and is yet to turn a profit.”

Streeter added: “About 60% of rooms in Germany are run by private hotels – there’s opportunity for an experienced hotelier like Premier Inn to establish a foothold. Analysts admire the ambitious roll-out plan, and the break-even point doesn’t seem too far out now, but it could be a while before Germany makes meaningful profits.”

US building permits
US housing starts
US oil inventories
Netflix Q3 results

Also on Wednesday, Netflix will release its trading update for Q3. The firm added 5.9 million subscribers in its second quarter after losing roughly a million in Q2 2022.

AJ Bell investment director Russ Mould and head of financial analysis Danni Hewson said: “Shares in Netflix are up by around 130% from 2022’s lows but they are down by more than a fifth from their 2023 high which is, technically, enough to put them back in a bear market and officially enough to place them 45% below their autumn 2021 peak.

“That slide owes much to a cocktail of higher interest rates, more competition, slower customer additions and, recently, investors’ worries over the twin threats of customer retrenchment when it comes to subscriptions and the screen writers’ strike.

“Bulls will continue to champion the stock, given its strong slate of shows – both new and returning – ongoing momentum in net customer additions and plans to monetise the subscriber base more effectively thanks to advertising, paid sharing and also gaming.”

UK CPI
Federal Reserve Beige Book
In Europe, quarterly results from ASML, SAP, ABB, Volvo, Deutsche Boerse and Svenska Handelsbanken
In the US, quarterly results from Tesla, Procter & Gamble, Abbott Labs, Morgan Stanley, LAM Research, Las Vegas Sands, Kinder Morgan, Travelers, Citizens Financial and Alcoa

Thursday 19 October

Trading statements from Rentokil Initial, RELX, London Stock Exchange, Mondi, Dunelm, Centamin, Deliveroo and Gear4Music
US existing homes sales
US weekly initial unemployment claims
In Asia, quarterly results from TSMC and Sands China
In Europe, quarterly results from Nestlé, L’Oréal, Roche, EssilorLuxxotica, Pernod Ricard, Nokia, Schindler and Renault
In the US, quarterly results from Philip Morris, AT&T, Blackstone, CSX, Freeport-McMoRan and Bank OZK

Friday 20 October

First-half results from Naked Wine
Trading statements from InterContinental Hotels and Foxtons
UK Government borrowing figures
UK retail sales figures
GfK UK consumer confidence figures

On Friday, consultants Growth From Knowledge (GfK) will release its latest UK consumer confidence survey. The data will complete a week of UK economic data releases, following updates on unemployment and inflation on Tuesday and Wednesday.

In September, the index improved four points to -21, the best score posted since January 2022.

AJ Bell’s Mould and Hewson said: “This latest reading will tell us whether a renewed surge in oil prices, coupled with signs of softness in the jobs market and higher interest rates, is taking a toll or not – note how the Misery Index, shown here in reverse order, seems to bear a close relationship to the GfK consumer reading.”

Japanese inflation
China one-year and five-year interest rates
German producer price (factory gate) inflation
In Asia, quarterly results from Hong Kong Exchanges
In Europe, quarterly results from Yara International
In the US, quarterly results from American Express, Schlumberger and Interpublic