ECB rate meeting – 25/10
The recent ECB meeting showed that policymakers remained determined to end the bond buying program by the end of this year, with the bar to not doing so relatively high. Inflation levels still seem fairly benign, despite recent comments from ECB President Draghi that the bank remained on course to raise rates a year from now.
The biggest concerns for policymakers appear to revolve around trade and the ongoing budget spat between the European Commission and Italy, and it is here that we could see the ECB’s policy start to unravel. The latest minutes showed that policymakers on the governing council also remain divided as to the accuracy of the banks economic projections, with some suggesting they are too positive.
US Q3 GDP – 26/10
The US economy has been racing ahead this year with Q2 GDP confirmed at 4.2%, as a result of the tax cuts implemented at the beginning of this year. Since then unemployment has continued to fall while wages have started to edge higher. While Q3 is unlikely to match the levels seen in Q2 there is still an expectation that Q3 will come in over 3% despite the disruptions caused by the US hurricane season.
A decent number this week will reinforce market expectations of a December rate rise.
Bank of Canada rate decision – 24/10
It is widely expected, on the balance of probabilities that the Bank of Canada will follow the Fed’s lead last month and raise rates by 25 basis points when they meet on 24th October.
A rising oil price, the recent USMCA agreement to replace NAFTA has removed a significant layer of uncertainty over the Canadian economy, where unemployment is around 15 year lows and though inflation dropped sharply from 2.8% to 2.2% in September, it still remains well above the Bank of Canada’s target rate, while core prices are at eight year highs.
France and Germany flash PMI’s (Oct) – 24/10
Earlier this month the German government downgraded its growth forecasts for the German economy, on concerns that escalating trade tensions were likely to impact key areas of the German export machine. The latest PMI numbers for both manufacturing and services would appear to bear this out with September manufacturing falling to a two year low. France’s numbers have also been similarly weak as a slowing global economy affects output, though services for both have been slightly more buoyant.
Whitbread (LON:WTB) – H1 - 23/10
While the recent sale of Costa Coffee to Coca-Cola (NYSE:KO) grabbed most of the headlines a few weeks ago, attention is now set to turn its latest first half results with much more focus than usual set to be on its now core business brand of Premier Inn.Having obtained a £3.9bn price tag shareholders will be looking to see how management intend on using some of the cash to expand the hotel side of the business. It already has plans to expand the number of rooms by over 15% by 2020, while the integration of its restaurants into the overall hotel package has helped to drive up revenue. It is also expanding in Germany in what is still a growing market.
RBS (LON:RBS) (Q3) – 26/10
Having returned to profit last year as well as finally drawing a line under its dispute with the US Department of Justice, the bailed out bank now needs to show that its underlying business model can still deliver a return in a UK economy that appears to have had a decent last six months. Speculation over whether the management will be able to continue with a regular dividend has been rife since the conclusion of the DOJ agreement earlier this year. Earlier this month the bank paid its first dividend since the bank was bailed out and this latest update should go some way to showing whether this likely to become a regular feature.
At its Q2 update the bank disappointed on profits but that was mainly because of further provisions in respect of legacy issues. These appear to be largely behind them and the latest numbers could well be the first time we get a clear look at the banks profit potential without the noise of exceptional items.
Microsoft (NASDAQ:MSFT) (Q1) – 24/10
The decision by CEO Satya Nadella to re-orientate Microsoft’s business model towards the cloud has helped the Windows giant keep pace with the technological changes being created across the internet.
Revenues from its cloud business grew 53% in its most recent quarter and appears to be leading the way in terms of its returns when it comes to product growth. Its other businesses of Office 365, LinkedIn (NYSE:LNKD) and gaming, which includes Xbox services also contributed as the old Windows business becomes a much less important side of the overall revenue stream.
Having turned over $110.36bn last year, this week’s Q1 update should give a decent indication as to whether the company is on track to deliver the 12% revenue growth that investors are pricing in for this fiscal year.
Twitter (NYSE:TWTR) (Q3) – 25/10
After almost 12 years, Twitter managed to post its first quarterly profit earlier this year. For all of that concerns remain about the company’s ability to monetise the users they have at a time when user growth appears to have plateaued.
In Q2 the company recorded $100m of net income against a backdrop of a flat lining user base, though some of the reasons for this are undoubtedly down to Twitter cracking down on bot and spam accounts. It is these concerns about the ability to monetise is user base which has seen the shares drop sharply from their summer highs to be trading near seven month lows.
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