Graham Spooner, Investment Research Analyst at The Share Centre, gives his thoughts on what to expect from companies announcing results week commencing 1 January 2018.
Companies reporting w/c 1 January
Next (Q4 standing statement)
The latest news that footfall on the high street for the Boxing Day sales was lacklustre won’t make pleasant reading for investors in Next and other retailers. However, this trading period covers the weeks leading up to Christmas which is notably key for the whole year. There are some hopes that trading could have been better especially given the more seasonal weather pattern and we’ll wait to see if shoppers have been seeking bargains on Next’s online store instead. However, the last trading update wasn’t very encouraging as the group reported sales falling by 7.7% partly due to the pressures faced by the consumer and online competition and this will no doubt show up in the full year sales figures.
We currently list Next as a HOLD
Announcements for the w/c 1 January 2018:
2, 3 and 4 January, UK purchasing managers indexes tracking UK manufacturing, construction and services, December – Markit/CIPS
The purchasing managers indexes (PMIs) give us our first indication of how well the UK economy performed in December and thus for the whole of 2017. Last month, the PMI tracking manufacturing rose to a 51-month high (58.2), the construction PMI rose to 53.1, an encouraging reading, especially given that the index fell to below 50 in the summer suggesting contraction in the sector. Alas, the Business Activity Index tracking services fell back to 53.8, mediocre by the standards of this index. Together, the three indexes suggest that the UK was on course for growing at 0.45% in Q4, did the readings for December support this projection?
3 January, FOMC Minutes, Meeting of December 12 - 13, 2017 – FED
US interest rates were increased by 0.25 percentage points in December to between 1.25% and 1.5%. However, did the minutes hint at further rises in rates under the new chair, Jerome Powell?
5 January, Q3 UK productivity – Office for National Statistics
Maybe UK productivity is the most important of all drivers of the UK economy; it sets the speed limit for expansion in the economy. In Q3, output per hour rose by just 0.1%. Economic output is a function of output per hour and how many hours are worked. For sustainable growth, productivity must grow faster.
Further announcements include:
1 and 2 January
• Purchasing Managers Indexes worldwide, including China, Euro area and US – Markit, Caixin (China) and ISM (US)
• Flash Estimate, euro area inflation, December – Eurostat
• US Employment Situation, December – U.S. Bureau of Labor Statistics
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