The anointing of a new Prime Minister could make it an interesting week for the pound, while the FTSE, DAX and Dow Jones encounter a clogged corporate calendar.
UK
At this point, it seems like a foregone conclusion that Boris Johnson will be Prime Minister by the end of Wednesday. However, there is always the chance of an upset, so the pound could be tense ahead of the results on Tuesday morning.
Once the new Tory leader is confirmed, the currency will be sensitive to whatever Brexit movements they start to make in their first few days in charge. Sterling has had a terrible time of it this year, repeatedly striking 27-month and 6-month lows against the dollar and euro respectively on increased fears of a no deal Brexit.
Considering the candidates’ positions on the matter, this change at the top is unlikely to help.
It is lucky the UK has this political shift to deal with this week, given that data-wise it has little to offer. The CBI industrial order expectations reading arrives on Tuesday, with the high street lending numbers on Wednesday and the CBI retail sales figures on Thursday.
What the calendar lacks in data it more than makes up for in corporate updates. PZ Cussons (LON:PZC) and FeverTree report on Tuesday. Britvic (LON:BVIC), ITV (LON:ITV), GlaxoSmithKline (LON:GSK), Marston’s (LON:MARS), Croda International (LON:CRDA), Antofagasta (LON:ANTO) and Brewin Dolphin (LON:BRW) are on Wednesday.
AstraZeneca (LON:AZN), Diageo (LON:DGE), Compass Group (LON:CPG), Daily Mail and General Trust (LON:DMGOa), National Express Group(LON:NEX) (LON:NEX), Unilever (LON:ULVR), Fuller Smith & Turner (LON:FSTA) (LON:FSTA) and Anglo American (LON:AAL) complete a mega Thursday. Finally things end with Vodafone (LON:VOD) on Friday.
US
US and Iran, US and China, a potential Fed rate cut: all three macro-movers have the ability to dominate the discourse this week, each story unresolved and in varying states of uncertainty (for the Fed it is more a case of how deep the cut will be, rather than if it will happen).
Even without those headline draws, the US has a decent smattering of data. The existing homes sales figures on Tuesday, the flash PMIs on Wednesday and the durable goods orders on Thursday are all preludes to Friday’s advance GDP reading, the first glimpse at how the country performed in Q2.
Like the UK, the US has a helluva earnings calendar this week. Visa (NYSE:V) and Coca-Cola (NYSE:KO) vie for attention on Tuesday, Facebook (NASDAQ:FB), Tesla (NASDAQ:TSLA) and a troubled Boeing (NYSE:BA) report on Wednesday, while Thursday sees juggernauts Amazon (NASDAQ:AMZN) and Alphabet (NASDAQ:GOOGL) joined by Starbucks (NASDAQ:SBUX) and Intel (NASDAQ:INTC). Twitter (NYSE:TWTR) then tweets out its latest figures on Friday,
Eurozone
The Eurozone’s week doesn’t really get started until Wednesday, with the release of the region’s flash manufacturing and services PMIs. Thursday then sees the German Ifo business climate reading followed by the month’s ECB meeting. There is a growing feeling that the central bank will cut interest rates in September, so investors will be on high alert from any comments signalling as such from Mario Draghi.
After its recent radical restructuring reveal, Deutsche Bank (DE:DBKGn) posts its latest results on Wednesday, joined by Mercedes-Benz-parent Daimler (LON:0NXX). The automotive industry then gets its second big update of the week on Thursday, as Volkswagen (DE:VOWG_p) unveils its recent performance.
Stock of the week: Fevertree Drinks PLC (LON:FEVR) – Interim Results on Tuesday 23rd July
Lurking the wrong side of £22, FeverTree is well off the £42-teasing all-time highs struck in September 2018. It has been in a particularly pronounced slump since early May, with disappointing UK drinks data and wet weather at the start of summer dragging the stock lower.
However, near the end of the May the company sounded upbeat in its AGM update, stating that whilst it is ‘mindful of last year’s exceptional summer trading performance in the UK’, it remains ‘confident in achieving Board expectations’ for the full year.
As for Tuesday’s interim results, investors will want to see the maintenance of its explosive revenue growth – in March it posted a 40% increase for FY18 – with special attention paid to how the company is doing in the USA.
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