1) Bank of England/UK wages/unemployment
Against a backdrop of speculation about Bank of England Governor Mark Carney’s future and last month’s rate rise, UK policymakers meet to assess some of the recent weakness in the latest PMI data for August. While no changes are expected the main focus on Tuesday will be on the latest wages and unemployment data for the three months to July. Wage growth excluding bonuses has remained steady at 2.7%, down from 2.9% in March, while unemployment edged slightly higher to 4%, but is still near multi year lows. Policymakers will be looking for wage growth to remain steady, or even edge back up again in order to justify last month’s decision to raise rates.
2) ECB rate meeting – 13/09
At its last meeting in July ECB officials confirmed that they remained on course to exit their asset purchase program by the end of the year, while also stating that rates were unlikely to rise before the end of the summer next year. There was much discussion around what that meant with ECB President Draghi asserting it meant towards the end of Q3. This week’s meeting is likely to see the ECB outline that it remains on course to begin the tapering process at the end of the month, despite current evidence that inflation still remains subdued. The ECB will also update its latest economic projections, against a backdrop of rising concerns about the imposition of tariff barriers on some areas of the European economy.
3) US Retail Sales (Aug) – 14/09
The US consumer has been remarkably resilient over the last few months with retail sales showing some decent gains in the last two quarters, and this week’s numbers look set to some decent gains for the sixth month in succession. The tax cuts announced at the beginning of the year still appear to be trickling down into the US economy, however there are warning signs with home sales starting to show signs of slowing down. For an economy that is quite sensitive to the vagaries of the housing market, falling property values could indicate early signs of a slowdown in consumer spending.
4) China Industrial Production/Retail Sales (Aug) – 14/09
Some of the most recent economic data out of China has been rather mixed, but nonetheless it has been showing signs of a slowdown in the world’s second biggest economy. Retail sales growth has dipped sharply in the last three months from the levels it was at the beginning of the year when it was around 10%. Industrial production has also been similarly weak, though it hasn’t as yet fallen below the 6% level that we last saw in 2015 when there were similar concerns about a sharp slowdown in the Chinese economy. More worryingly fixed asset investment also slowed last month to multi year lows of 5.5%. Against a backdrop of rising trade tensions further weakness here could signal further turmoil in emerging markets.
5) JD Sports – H1 – 11/09
It’s been a tough year for UK retail thus far with a host of restructurings and profit warnings from a host of well-known retail brands. Earlier this year JD Sports Fashion (LON:JD) surprised a few people by expanding into the US with the acquisition of Finish Line for £400m, a company that is one of the key suppliers to Macy’s department store. Given the strength seen so far this year from US consumers this may well have been a smart move, however the strains on US consumers wallets aren’t that dissimilar to the ones being faced by UK consumers, which means that JD Sports is just as vulnerable to the on-line threats being posed by the likes of Amazon (NASDAQ:AMZN), as its US counterparts. That being said the price of £400m seems a small price to pay to access one of the world’s largest leisure ware markets. This week we’ll get an early indication as to how well the company is doing, not only at home but also in its international markets, with the company already announcing that it has taken a £400k hit from the recent collapse into administration of House of Fraser.
6) Dunelm Group – FY18 – 12/09
Earlier this year Dunelm Group (LON:DNLM) issued a profits warning as a decline in footfall saw management report that group sales fell 1.4% in its latest quarter, led by a 4.6% fall in store sales. While most of this was offset by a big jump in on-line sales it nonetheless raised concerns about the sustainability of margins across the entire business, as retailers in general continue to struggle in a challenging business environment. Losses on two recently acquired businesses have also weighed on profits with investors hoping that the write downs that were taken in the summer are the final word when it comes to integrating, both Worldstores.co.uk and Kiddicare.com into the business model.
7) Apple (NASDAQ:AAPL) – 12/09
There’s been much speculation about in the last few weeks about the next range of product upgrades from the US’s most innovative company as management seek to maintain expectations about Apple’s ability to sustain its place as a cash machine. In terms of dominance of the mobile phone market it is slowly losing market share globally to Samsung (LON:0593xq) and Huawei (SZ:002502). This shouldn’t be too much of a surprise given that the next areas for growth are likely to be in places like India, consumers are likely to be much more price sensitive. This week we’re likely to see an upgrade to the £1k iPhone X, with the release of the iPhone XS. Not only that we’ll probably see upgrades to the iPhone 8, as well as a new Apple Watch, along with some upgrades to the various tablet versions, though the iPad mini may well be on borrowed time given we haven’t seen an upgrade to that since 2015.
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