1. Fed minutes – 09/10
The most recent Fed decision turned out to be a rather contentious one. While a rate cut was widely expected the level of dissent in terms of the divisions on the committee was not. Dissents came from the hawkish as well as the dovish side with both Esther George of the Kansas City Fed and the Boston Fed’s Eric Rosengren pushing back against the cut, like they did in July, while James Bullard of the St. Louis Fed argued for a deeper move of 50bp.With the FOMC so split this week’s minutes will garner a closer insight into how much deeper the divisions go with respect to the prospect for further rate cuts in the months ahead, particularly since the Fed statement didn’t differ that much from the one in July. We could also get an insight into how Fed policymakers viewed the current concerns over the repo market.
2. China Trade (Sep) – 08/10
A lot of the recent numbers we’ve seen out of Asia in the past two weeks have seen both Japan and South Korean exports slide sharply. This doesn’t bode well for the latest China trade data, particularly since the bulk of US tariffs are now likely to be showing up in terms of costs. Recent Chinese trade data has shown that exports away from the US have improved which has to some extent offset some of the damage, however we still saw a 1% decline in August. In terms of imports the picture is more worrying with every month this year showing big declines, with the exception of April, which saw a rise of 4%. The last two months have seen declines of 5.6%, and while we have seen some improvement in the recent PMI data there is a hope that this might get reflected in the latest trade data for September as the Chinese economy absorbs the latest rate cuts and stimulus packages.
3. US, China Trade talks restart – 10/10
At the time of writing the US and China are expected to restart trade talks in Washington with Chinese vice Premier Lie He due to lead a Chinese delegation. The bigger question is likely to revolve around where the starting point is likely to be. Earlier this year talks broke down when they were in the words of US Treasury Secretary “90% done”. Does that mean that they can be picked up where they left off, or are we starting from scratch?
4. UK Manufacturing Production (Aug)
The UK economy, much like the rest of Europe has been struggling when it comes to the manufacturing sector. Recent PMI’s would suggest that the manufacturing sector could be about to show a significant contraction in this quarter, and with some plants on temporary shutdown the weakness in some of the recent data could well be overstated.
5. Onthemarket PLC (LON:OTMPO) – H1 20 - 10/10
The UK property market has been at the epicentre of a significant amount of disruption on recent years, with companies like Purplebricks (LON:PURP) and Zoopla disrupting the traditional model.The launch of OnTheMarket in 2015 has been part and parcel of this and the recent slowing in the housing market has affected margins and revenues across the entire sector. The first half numbers should tell us a great deal as to whether the company will be able to meet its full year targets. Revenue has been a particular problem for OnTheMarket with expectations of just around £18m for the current year, which is still better than last year, but is much less than was expected a few months ago. Brexit uncertainty isn’t helping making buyers more cautious which means that losses are likely to come in at about £9.8m for the full year.
6. Dunelm (LON:DNLM) sales report – 10/10
It’s difficult not to like Dunelm, and not just because my other half likes mooching around the store, and having the occasional coffee in the in store café. The share price has been one of the outperformers so far this year in UK retail, prompting some speculation that the good news may well be priced in. These concerns may well explain why the share price has started to trade sideways in the past three months. In the latest numbers like for like sales rose 7.7%, while operating profits rose strongly, prompting a nice special dividend. As it continues to invest in securing its online position in homeware there is a risk that profits may well start to flat line, as profit margins shrink.
7. EasyJet PLC (LON:EZJ) Q4 – 08/10
The travel sector has been in the news a lot this year with the difficulties being faced by airlines like Flybe, and Air Berlin being cases in point this year, along with the problems being faced by Norwegian it’s a difficult operating environment for the budget sector. Even Ryanair has been feeling the pinch, having to cut its profit forecasts on a number of occasions over the last 12 months.The collapse of Thomas Cook may well offer some respite in that regard, though it may be too soon to be reflected in this quarters numbers. At its most recent update in July revenues saw an increase of 11.4%, despite the company having to set aside £15m in respect of the Gatwick drone incident. At that update management said they expected capacity to rise by 0.7% in H2, and expected headline profits before tax to come in between £400m and £440m for the current fiscal year. In light of events at Thomas Cook it will be interesting to see if management feel confident about raising that target higher?
8. Levi Strauss (NYSE:LEVI) – Q3 19 - 08/10
When Levi Strauss (NYSE:LEVI) IPO’d earlier this year it was one of those rare beasts, namely a new issue that was profitable, with a tried and trusted business model. Despite this its share price performance has been underwhelming, with the shares currently just about above their IPO price. When the company reported in Q1 profits came in at $146.6m or $0.37c a share on revenues of $1.44bn, with sales strong in both the US and Asia markets. In Q2 the company stumbled due to the costs of its IPO, it missed profits expectations, by $0.05c a share, coming in at $0.07c. Revenues were better than expected, however with growth in all of its major regions, and the company was at pains to maintain its full year outlook, with expectations for Q3 expected to see profits rise to $0.28c a share.
9. Delta Air Lines (NYSE:DAL) Q3 19 – 10/10
In Q1 Delta returned $1.6bn to shareholders, with little sign that passenger demand was slowing, as it reported a record $10.47bn in revenue, while profits jumped to $730m. In Q2 the company built on this with another record revenue beat of $12.5bn, 20% above the previous year, largely due to premium class demand. The company may well have also been helped by the fact it doesn’t have any Boeing (NYSE:BA) 737 MAX’s in its fleet.
There’s a lot to be said for getting on a plane and not being worried about it falling out of the sky. For Q3 profits are expected to come in at $2.27c a share, with revenues needing to come in near to the levels seen in Q2 if management are to meet targets of total full year revenues of around $47bn.
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