1. European elections – 26/05
The European election results could well offer up the prospect of a European parliament more divided than at any time in its history. It has become increasingly apparent that there is a growing quorum of voters dissatisfied with the status quo.
The reaction of the established order to this insurgency has been to use unflattering labels to tarnish those who want to promote change. If these elections bring forward a more eurosceptic bias to EU policy making, then the changes necessary to make Europe work better are likely to be that much more difficult to achieve.
Furthermore any result which favours the Brexit party is likely to add to concerns over a “no deal” Brexit now that Theresa May has announced her resignation as UK Prime Minister, especially since her replacement is likely to be a Brexiteer.
2. Bank of Canada rate decision – 29/05
Until recently there had been concerns about the health of the Canadian economy. Weak GDP and weak consumer spending numbers had seen the Bank of Canada pivot towards a much more dovish position in recent months.
The removal of the reference that rates might need to rise further over time, earlier this year saw expectations rise that the next move in rates might well be lower, and possibly come later this year. These expectations have subsided a little in the wake of some strong payrolls numbers from ADP as well as public payrolls. A pickup in retail spending has also brightened the mood, however this isn’t likely to prompt the Bank of Canada to change from its newly adopted dovish stance. No changes in policy are expected, with most attention expected to be on the guidance than the actual decision itself.
3. US Q1 GDP – 30/05
The US economy surpassed all expectations in the first quarter when preliminary Q1 GDP numbers were released just over a month ago. A 3.2% expansion was comfortably above the 2.3% consensus, however it was largely driven by rebuilding of inventories, as personal consumption halved from 2.5% to 1.2%. This week’s adjustment isn’t expected to alter the narrative too much, with any changes likely to be minimal.
4. China Manufacturing/non-manufacturing PMI (May) – 31/05
Recent data has pointed to a Chinese economy that is struggling to maintain traction against a weak global economic backdrop. A pick up in March manufacturing activity proved to be rather short-lived as April activity fell back again. Services is proving to be more resilient, however recent retail sales data has shown that consumer demand is at 16 year lows. If this week’s PMI’s are similarly weak then the calls for more stimulus are only likely to get louder.
5. Pennon Group (LON:PNN) FY19 – 30/05
The owner of South West Water as well as waste management company, Pennon Group has seen its shares underperform in recent weeks largely over concerns that its water business might be forcibly acquired by an incoming Labour government at a price below market value in the event of a general election that sees a change of administration.
In March the company announced it taken a provision of £16m on the back of the collapse of Interserve (LON:IRV). In terms of its other businesses South West Water was outperforming, while Viridor was expected to meet full year expectations.
6. Daily Mail and General Trust (LON:DMGOa) H1 - 30/05
Earlier this year DMGT announced it was selling its 49% stake in Euromoney and returning the proceeds to shareholders as it looks to simplify the business. Like a lot of other established media companies the income from advertising revenue has been in slow decline.
One of the few bright spots has been MailOnline which has helped offset a slow decline in print media sales, with increases in advertising revenue.
7. Abercrombie and Fitch (NYSE:ANF) Q1 20 – 29/05
The US retail space has seen a significant amount of disruption in recent years as consumer shopping habits change. Even trendier brands like Abercrombie and Fitch have struggled with falling sales, which in turn has prompted them to close underperforming stores.
Under its current plans it still intends to close up to 40 stores in this current fiscal year as it revamps its Hollister and Abercrombie Kids branding.
8. Dick’s Sporting Goods Inc (NYSE:DKS) Q1 20 – 29/05
Dick's has also suffered from similarly weak retail trends in recent months. In its latest earnings update the company stated that it expected profits to be flat against 2018. One of the factors weighing on the company is likely to be the decision to stop selling firearms which is expected to reduce its revenues.
9. Dell Technologies (NYSE:DELL) Q1 20 – 30/05
The return of Dell to publicly traded markets at the end of last year has seen the shares rise steadily rise for most of this year. In its last update and its first since returning to public markets, the company posted a rise in Q4 revenues of 9% to $23.84bn, helped by strong growth in servers and storage solutions. In terms of full year revenues for 2020, the company said it expected this to come in between $93bn and $96bn.
10. Gap (NYSE:GPS) Q1 20 – 30/05
Gap shares have had a rotten time of it in recent months, trading at two year lows, the owner of Banana Republic and Old Navy has been struggling to boost its earnings numbers in the face of a difficult retail environment.
In February the company announced that it would be splitting Old Navy which helps drive 75% of the company’s profitability while looking to pare back Gap and Banana Republic which have both underperformed, with plans to close 230 Gap stores over the next two years. This will allow the company to play to its strengths and mean that Old Navy profits and revenues can be reinvested in Old Navy rather than subsidising its weaker siblings. The split is expected to be completed by 2020.
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