Weekly outlook: Will HSBC and Lloyds fare better than Barclays?

Key events for UK wealth managers for the week starting 20 February



Monday 20 February

  • – In Australia, quarterly results from BHP
  • – In Europe, quarterly results from Michelin
  • – In the US, quarterly results from Checkpoint Software, Palantir and Lattice Semiconductor

Tuesday 21 February

  • – Full-year results from HSBC, Anglo American, Antofagasta, Smith & Nephew and Intercontinental Hotels

Analysts will pay particular attention to the outlook section in HSBC’s full-year results on Tuesday. The bank has grown its presence in China in recent years, with the scale of recovery following the country’s shift away from its zero-Covid policy likely to play a key role in the firm’s future performance.

Hargreaves Lansdown head of equity funds Steve Clayton said: “Investors have been warming to HSBC in recent months, in response to China re-opening its economy. With Covid controls fading away, investors are hoping that the Chinese economy will spring back into life, driving trade volumes higher. That would play well for HSBC which has been focusing its business ever more toward China. In the near term though the drivers of the business are closer to home.

“Cost controls and the degree of success in widening net interest margins will determine the 2022 outcome. The outlook for 2023 will depend on the pace and scale of Chinese recovery and how HSBC manage their capital base; a pending disposal of their Canadian business raises the possibility of bumper distributions toward the end of the year.”

  • – Trading statement from Safestore
  • – Flash purchasing managers’ indices (PMIs) for manufacturing and services industries from Asia, Europe, the UK and the US
  • – German ZEW economic sentiment survey
  • – US existing homes sales
  • – In Asia, quarterly results from Singapore Airlines
  • – In Europe, quarterly results or trading updates from Walmart, Home Depot, Medtronic, Coinbase, Molson Coors, Capgemini and Caesars Entertainment

Wednesday 22 February

  • – First-half results from Finsbury Foods and Springfield Properties
  • – Interest rate decision from the Reserve Bank of New Zealand
  • – EU industrial production figures
  • – German Ifo business climate survey
  • – Belgian Courbe Synthetique business sentiment survey
  • – US weekly oil inventories
  • – Lloyds full-year results

Following on from HSBC, Lloyds will become the latest FTSE 100 bank to report its results. Last week, Barclays disclosed it suffered from £1.6bn litigation charges leading to a fall in pre-tax profit.

AJ Bell investment director Russ Mould and head of financial analysis Danni Hewson said: “Lloyds will be last of the big five FTSE 100 banks to report its results, but the figures should be no less informative for that, especially as the shares are on a good run – they are up by around 40% from the autumn lows, although that does mean they are still only broadly flat over the past year.

“Moreover, Lloyds is the UK’s largest mortgage lender, with a book of some £300bn, has a £14bn credit card book and has net exposure to UK commercial real estate of some £10bn.

“The headline figure to watch will be pre-tax profit. For the fourth quarter, analysts are looking for £1.9bn against £1bn a year ago, when £1.5bn in remediation and compensation costs, restructuring charges and asset write-downs weighed heavily. That means for the full year, the consensus forecast for 2022’s pre-tax profit is £7bn, against £6.9bn in 2021.”

  • – In Asia, quarterly results from Baidu
  • – In South Africa, quarterly results from Anglogold Ashanti
  • – In Europe, quarterly results from Stellantis, Danone, Wolters Kluwer, Schindler, Fresenius, Pirelli and BESI
  • – In the US, quarterly results from Nvidia, eBay, Mosaic and Bausch & Lomb

Thursday 23 February

  • – Full-year results from Rolls-Royce, Mondi, WPP, UNITE, Serco, Spectris, Drax and Hochschild Mining
  • – First-half results from Howden Joinery, Hikma Pharmaceuticals, Hays and Genus
  • – EU inflation final reading
  • – US Q4 GDP growth estimate
  • – US weekly unemployment claims
  • – US weekly oil inventories
  •  In Asia, quarterly results from Alibaba, Hong Kong Exchanges, APAC Budweiser Brewing, Lenovo and Qantas
  • – In Europe, quarterly results from Porsche, Deutsche Telekom, Essilorluxottica, Axa, ENI, Telefonica, Saint Gobain, Accor, Adecco and Valeo
  • – In the US, quarterly results from Moderna, Warner Bros Discovery, Newmont and Norwegian Cruise Line

Friday 24 February

  • – Full-year results from International Consolidated Airlines and CVS
  • – Japanese inflation
  • – US new homes sales
  • – UK Consumer Confidence data

On Friday, research firm Growth for Knowledge will release February’s UK Consumer Confidence report.

In January, the general economic situation and personal finances were highlighted as particular areas of concern as consumer confidence remained low.

Isabel Albarran, investment officer at Close Brothers Asset Management, said: “In true British fashion, the UK consumer has been gloomy. We think this is primarily due to shrinking real incomes and falling house prices, which influence people’s confidence in spending. Consumers have likely already had to tap into their savings to sustain spending, as high inflation has eaten away at purchasing power.

“However, with confidence low, consumer caution may prevail, and spending may slow, contributing towards recession in 2023. Savings data supports this thesis, though we expect households to prioritise spending on experiences. Ryanair recently announcing record summer booking rates, as people look to escape the cold winter and get away from everyday pressures. In contrast, goods spending could come under pressure.”

  • – In Europe, quarterly results from BASF and Amadeus


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