Monday 7 October
- Trading statement from Ferrexpo
- Halifax UK house price index
- German factory orders
- EU retail sales
Tuesday 8 October
- First-half results from S&U
- British Retail Consortium (BRC) UK retail sales
- Japanese wage growth
- German industrial production
- US NFIB smaller companies survey
- In the USA, quarterly results from PepsiCo
Wednesday 9 October
- Interest rate decision from the Reserve Bank of New Zealand
- US oil inventories
Thursday 10 October
- Full-year results from Volution
- Trading statement from Norcros
- US weekly unemployment claims
- In Japan, quarterly results from 7&I and Fast Retailing
- In the USA, quarterly results from Delta Air Lines
Friday 11 October
- UK GDP growth
- UK manufacturing, construction and industrial output growth
- US producer price (factory gate) inflation
- In the USA, quarterly results from Bank of New York Mellon and Fastenal
Hays first-quarter trading update
Recruitment agency Hays will provide its first-quarter trading update on Friday, succeeded by PageGroup the following Monday and Robert Walters on Tuesday.
Some look to the results of the firms as insight into the wellbeing of the job market as Central Banks look to navigate towards a soft landing. In July, the headline UK unemployment rate sat at 4.1%, down from 4.4% in April and May. Job vacancies, however, have been on the decline as August 2024 saw a 14% decrease from August 2023.
Russ Mould, AJ Bell investment director, Danni Hewson, AJ Bell head of financial analysis, and Dan Coatsworth, investment analyst, said: “The slide in vacancies and rise in unemployment from the lows tallies with what Hays is seeing in the UK, where the recruiter’s net fee income has fallen year-on-year for seven consecutive quarters.
“Overall group net fee income has dropped for five straight quarters and shareholders and analysts will be looking for some amelioration in the rate of decline as a sign that the worst may be over, in the UK and beyond.”
Analysts will eye trends in temporary hires as well as geographic locations in the update. An improvement in temporary hire numbers could mean an upswing in general outlook, the AJ Bell team said.
“Besides the fee figures, another number to watch is headcount. Hays reduced the number of fee earners by 15% in its last fiscal year to 7,302 and any stabilisation here would again be a welcome sign, although the firm is looking to make a further £30 million in cost savings by June 2027, to add to the £60 million annualised rate recorded in the year to June 2024,” Mould, Hewson and Coatsworth said.
For the fiscal year to 2025, current market consensus includes sales of £6.5bn, a decrease of 6% year on year; pre-tax profit of £78m, down from £95m, and the same dividend of 3p per share.
US banks’ third-quarter updates
JPMorgan Chase and Wells Fargo will release their Q3 updates on Friday, 11 October, with the next week holding results for Bank of America, Citigroup, Goldman Sachs, and Morgan Stanley.
The update comes in a strong period of recovery, post the Silicon Valley Bank crisis in spring 2023, for the Philadelphia KBW Banks index. While the index has increased by over 40% in the past year, it still sits well below its all-time highs in 2022. The AJ Bell team said the assurance for the sector comes from a variety of factors, including “Fed interest rate cuts, the ongoing resilience of the US economy, and the apparently successful pushback by major lenders against new capital adequacy requirements called for by the so-called Basel Endgame regime”.
“That said, earnings momentum is flagging a little as net interest margins (and net interest income) flatten out, loan loss provisions increase, and investment banking operations suffer a relative dearth of initial public offerings (IPOs) on the US stock market,” Mould, Hewson, and Coatsworth said.
“Had it not been for the $8 billion gain registered on Visa stock in the second quarter at JPMorgan Chase, aggregate net income across the four Main Street Banks would have declined for three quarters in a row and the July-September period would have made it four.”
Analysts will watch for the headline net income and earnings per share figures when results are released, as well as keep an eye on fourth quarter guidance. Other figures to watch will include aggregate loan growth, which was up barely 1% across the Big Four in the first quarter, and loan impairments, which hit $8bn across the second quarter.
“There are signs of rising credit card and auto loan delinquencies among lower income brackets, as inflation and interest rate rises take their toll, but the overall totals look modest and interest rates are starting to fall, so that could help from the fourth quarter onwards, at least,” the AJ Bell team said.
Cash return to investors will also be on the docket, with the Big Four declaring $28.4bn in share buybacks and paying out $15.5bn in dividends throughout the second quarter of 2024.
