Proactive Investors - In the week leading up to Christmas, there’s plenty of opportunity for the Santa rally that has been fleetingly glimpsed, though only a small sprinkling of updates from FTSE 350 companies, including Carnival (NYSE:CCL), Bunzl (LON:BNZL) and Petrofac (LON:PFC).
Closing off the week Friday will see the London Stock Exchange close early, at midday, to allow extra time for the seasonal festivities.
There should also be a smattering of US earnings reports too, from the likes of Nike , FedEx (NYSE:FDX), General Mills (NYSE:GIS) and Micron.
As for macroeconomic matters, the Bank of Japan and People’s Bank of China both make interest rate announcements in the early hours of Tuesday, with the Czech, Hungary, Indonesia and Turkey central banks also meeting in the week. The only one expected to hike rates is Indonesia, however.
UK and US gross domestic product numbers are due on Thursday, while on Friday there is also US personal consumption data and durable goods orders.
MONDAY 19 DECEMBER
Nothing in the City diary except for AGMs, unless you’re interested in Slovakian unemployment data, German IFO or US housing numbers.
Significant announcements expected on Monday
AGMs: Abingdon Health Limited (LON:ABDX), Beeks Financial Cloud Group PLC (LON:BKSB), China Nonferrous Gold Limited (LON:CNGC), Conygar Investment Company PLC (LON:CIC), Renalytix PLC (LON:RENX), Technology Minerals (LON:TM1)
Economic announcements: NAHB housing index (US)
TUESDAY 20 DECEMBER
Being just one of the few companies in the diary normally brings extra attention, though not necessarily in the weeks either side of Christmas.
Petrofac Limited, which is still repairing its reputation after a Serious Fraud Office investigation, has not have wanted much attention over the last few years and amid strikes by North Sea workers this month and news that chief executive Sami Iskander is leaving, it is again in a state of flux.
Elsewhere, small cap Redx Pharma PLC will report prelims fresh from signing a clinical trial collaboration and supply agreement with Merck (MSD) to evaluate its cancer treatment in combination with US drugs giant's blockbuster, Keytruda.
Redx Pharma also recently revealed that a second drug from its pipeline has moved into phase II clinical trials following the recruitment of the first patient to its programme.
In the US, Nike Inc (NYSE:NKE) reports second-quarter numbers, with its shares having slipped to two-year lows back in October due to concerns that the hit to its China business could see an even bigger decline to the 19% fall in revenues seen at the end of last year.
For the first quarter Nike correctly guided to revenues to be flat to slightly up and elevated costs versus last year - though investors were less pleased with the 44% rise in inventory and an even bigger increase in the US, and a fall of 16% in China sales even as sales in the US increased.
For Q2 Nike said it expects to grow revenue by low double digits on the basis of a pickup in consumer demand, with earnings per share forecast to come in at US$0.65.
Significant announcements expected on Tuesday
Trading update: Petrofac Limited
Finals: RedX Pharma PLC
US earnings: General Mills, BlackBerry, FedEx, Nike
AGMs: Conroy Gold (LON:CGNR) & Natural Resources PLC, eEnergy Gorup PLC, Karelian Diamond Resources PLC (AIM:KDR)
Economic announcements: Building Permits (US), Housing Starts (US)
WEDNESDAY 21 DECEMBER
Relative riches in midweek with a FTSE 100 company, in the form of Bunzl PLC (LSE:BNZL), which issued a bullish update a few weeks ago but has seen the investor confidence drain away in recent days, not helped by sentiment being dented by reports the UK is close to a ban on single use plastics.
This has drawn attention to how much of the company's business is reliant on single-use and disposable items in packaging, hygiene, personal protection equipment, cleaning and other products for food, retail, safety, healthcare and other sectors – but the impact is not expected to be seen in this week’s update.
Also reporting is Carnival PLC (LSE:CCL), which was a blue-chip company itself until the pandemic saw its cruise ships become virus hotspots – or ‘floating petri dishes’ – turned away from ports around the world.
The Anglo-US company is still battling the hangover effects, with analysts highlighting concerns around rising wage and advertising costs as well as fuel volatility.
In macro news, US consumer confidence will be in focus, which rose to a six-month high in September but has started to soften, despite evidence that inflation is starting to come down.
“The main reason for the slowdown is more than likely down to the fact that interest rate rises from the Federal Reserve are now starting to have an impact on credit costs, which in turn is hammering the US housing market, which has seen sales fall every month this year, except January,” said market analyst Michael Hewson at CMC Markets.
“We’re also seeing services level inflation starting to become stickier and this also appears to be affecting consumption patterns. This pattern of higher prices is expected to see consumer confidence continue to soften below 100 to 99.9 and a four-month low.”
Significant announcements expected on Wednesday
Trading updates: Bunzl PLC, Carnival PLC & Corporation
US earnings: Micron Technology (NASDAQ:MU)
AGMs: 7digital Group PLC, BATM Advanced Communications Ltd (LSE:BVC), dotDigital Group PLC, Northamber PLC
Economic announcements: MBA Mortgage Applications (US), Current Account (US), Consumer Confidence (US), Existing Home Sales (US), Crude Oil Inventories (US), Public Sector Net Borrowing (UK)
THURSDAY 22 DECEMBER
With no London-listed companies in the diary for those still paying attention, there may be extra attention on final confirmation of the UK’s third-quarter gross domestic product – especially if there are any surprises as none are current expected.
They should say that the UK economy contracted 0.2% in third quarter, with private consumption providing the main drag.
The 0.2% contraction was slightly better than initially expected, amid high inflation squeezing pay packets in real terms, twinned with rising interest rates.
Significant announcements expected on Thursday
US earnings: Paychex (NASDAQ:PAYX)
AGMs: Beximco Pharmaceuticals (AIM:BXP) Ltd, Gulf Investment Fund, Solgold PLC
Economic announcements: Gross Domestic Product (UK), Current Account (UK), Continuing Claims (US), Gross Domestic Product (US), Initial Jobless Claims (US), Personal Consumption (US), New Homes Sales (US)
FRIDAY 23 DECEMBER
US data will be in focus for the hard-hearted or hard workers that haven’t broken up for the holidays yet.
Having seen the Federal Reserve raise rates by another half a percent in the past week, marking a slowdown in the pace of rate rises from the previous 0.75 percentage points, Friday’s core PCE numbers could set a benchmark as to the size of future rate hikes as we head into 2023, says CMC Markets’ Michael Hewson.
Core PCE is the Fed's preferred inflation measure and thus often receives as much attention as the main CPI figures.
Recent PPI and CPI prints have shown that inflation is still coming down, “albeit not as fast as perhaps the prevailing narrative of the peak inflation camp would like”, he adds.
October’s PCE core deflator fall to 5%, while PCE deflator fell from 6.3% to 6%.
“In light of last week’s Fed decision this week’s PCE numbers could well start to shape a narrative of whether we get another 50bps when the Fed next meets at the start of next year, or whether we get another step down to 25bps,” says Hewson.
Friday 23 December
AGMs: Parkmead Group (AIM:PMG) PLC, Plexus Holdings PLC (AIM:POS), Wildcat Petroleum (LSE:WCAT) PLC
Economic announcements: Durable Goods Orders (US), Personal Consumption Expenditures (US), Personal Income (US), Personal Spending (US), Consumer Sentiment (US), New Homes Sales (US)