The week ahead – AstraZeneca, Next, BAE Systems, Rolls-Royce, Amazon, Apple and Meta in focus

1) FOMC rate meeting – 30/07 – will we see the likes of Waller and Bowman vote to cut rates in light of their recent politically expedient shifts towards a more Trump friendly position. With current Fed chair Powell under increasing fire from an increasingly hostile US President we are getting increasingly close to an announcement which could see Powell’s successor become known well before May 2026, when Powell’s term comes to an end. Of course, all this market brouhaha conveniently overlooks the fact that Powell’s vote is merely one of many. While many have speculated that Powell might be forced out early it’s hard to imagine a scenario like this that would be market friendly for the Trump administration. Whatever Powell’s faults he is the one steady hand standing between the US government and a bond market sell-off. Any indication that the FOMC’s hand is being forced is unlikely to be well received by markets. Powell will know this, as should the rest of the FOMC. As long as a rate cut can be justified then a rate cut will happen, although not on the scale that perhaps Trump will like. September remains the most likely in terms of timing with Jackson Hole likely to be the staging post for the timing.   

2) US non-farm payrolls (Jul) – 01/08 – the US labour market continues to look resilient despite the calls from President Trump for the Fed to cut rates, and for Powell to be replaced. June payrolls saw another reasonably solid number of 147k, despite concerns over rising jobless claims data. A very weak ADP report also prompted worries over cracks in the US labour market when the June report showed a loss of -33k jobs. It’s certainly something that may well weigh on the Fed’s deliberations when they meet earlier in the week, however with the unemployment rate still anchored at 4.1% it’s hard to imagine a consensus for a rate cut yet amongst the majority of the FOMC, even if the likes of Bowman and Waller send out signals to the Trump administration that they can see a case for a cut soon.     

3) Bank of Japan rate decision – 31/07 – to hike or not to hike? Unlikely due to political uncertainty and a slowdown in the Japanese economy likely to keep policymakers on hold, especially with the Nikkei 225 at record highs.

4) Barclays H1 25 – 29/07 – a solid set of Q1 numbers saw Barclays post a 19% increase in pre-tax profits to £2.7bn. The numbers were strong across the board with investment banking and trading business seeing a 16% increase in revenues to £3.87bn. Equities trading also did well, with revenues rising by 9% to £963m, while FICC rose 21% to £1.7bn. Advisory was the only weak spot, revenues declining 3%. Total income rose 11% to £7.7bn with the UK bank also enjoying a good quarter as revenues rose 14% pushing above £2bn. Costs were also higher, rising 7%, although some of that was down to absorbing the assets of Tesco Bank. Credit impairments were higher at £643m, with the bank citing US macro uncertainty and the migration impact of Tesco Bank's assets. One notable item from the Barclays UK results was that 30- and 90-day arrears remained low at 0.7% and 0.2% respectively. Loans and mortgages to customers rose by £1.9bn to £209.6bn while customer deposits were down by £1.1bn at £243.1bn. Guidance was kept unchanged.

5) AstraZeneca H1 25 – 29/07 – been in the news a lot recently and not necessarily for good reasons, speculation that one of the UK’s biggest companies as well as assets could move to the US as it looks to avoid the possibility that it might fall victim to tariffs on medicines imported into the US. AstraZeneca generates 42% of its revenues in the US so it’s not something management can ignore despite the damage it would do to US healthcare. It’s not as if the UK government has made the company feel welcome, reducing a £90m pledge to £40m in respect of upgrading its Speke vaccine hub prompting the company to cancel the project. By contrast this month AstraZeneca said it was planning to invest $50bn in the US by 2030. That more or less tells you all you need to know when it comes to how companies perceive the UK as an investment destination. When AstraZeneca reported in Q1 the pharma giant said that revenues increased 7% to $13.6bn and a 34% rise in profits. Strong performance in Oncology with a 10% increase in revenues there driven by sales of cancer treatments Tagrisso, Imfinzi and Enhertu. The only cloud was that the company may well be liable for a penalty in China over illegal drug importation allegations. Guidance unchanged.    

6) Next Q2 26 – 31/07 – a big test this week as Next looks to update the markets with an insight into the UK consumer and sentiment more broadly. In Q1 Next surprised the market with another upgrade to its profit guidance, although it did come with a caveat. Full price sales rose 11.4% in Q1 which was £55m ahead of consensus. Since that announcement the shares have stalled somewhat, not altogether surprising when you consider recent retail sales numbers. Next management said they believed that the reason for the strong Q1 was due to warmer spring weather bringing forward consumer purchases of summer wear. Due to this perceived pull forward, Q2 sales guidance was kept unchanged at 6.5%, however profits guidance was raised to £1.08bn an increase of £14m. Sales guidance for H2 is expected to be weaker at 3.5%, with most of the growth expected to come in H1. Next full price annual sales are expected to rise by 6% to £5.4bn and total group sales of £6.6bn an increase of 5%. 

7) Shell H1 25 – 31/07 – had a rather indifferent quarter in Q1 with adjusted earnings down 28% to $5.58bn, compared to Q1 2024, largely due to the recent falls in oil prices. The company still managed to announce another $3.5bn share buyback, marking the 14^th successive quarter more than $3bn has been set aside in respect of share repurchases. The company reaffirmed its capex budget for 2025 at between $20bn and $22bn and has been regularly linked with a bid for its UK counterpart BP. With oil prices continuing to languish in the mid $60’s it remains a stretch that Shell might entertain a bid for BP given the challenges it faces with its own business model and the problems in its chemicals division which is struggling with weak margins, and where the company has been looking to offload some of its assets. Earlier this month Shell flagged weakness in this area due to maintenance as well as underperformance in its integrated gas business. Upstream output is projected to come in between 1.66m and 1.76m boepd, however we are expected to see a $200m exploration write off. LNG production is expected to come in between 6.4m and 6.8m metric tons for Q2.

8) Rolls-Royce H1 25 – 31/07 – Rolls-Royce shares have continued to go from strength to strength this past few months, as this previous post Covid basket case makes new record highs week on week. In April the company reaffirmed its full year guidance of underlying operating profit and free cash flow of between £2.7bn and £2.9bn in a trading update issued at its AGM recently saying that any tariff impact can be mitigated. Long term EFH are now at 110% of 2019 levels. Certification of new blades for the Trent 1000 engine which will double the life span of the engine expected soon. New engine for Airbus A359-900 certified in April. Final tender to Great British Nuclear submitted in April for SMR with the decision approved in June with a view to signing contracts later this year for up to three 470MW reactors on sites which have yet to be designated, with the first site expected to be announced by the end of this year. 

9) HSBC H1 25 – 30/07 – Q1 results were somewhat of a mixed bag after the bank reported a sharp decline in both Q1 revenues and profits. The main reason for the fall in revenues and profits was down to the fact that in the same quarter last year there were one-off gains due to the sale of its operations in Canada and Argentina. Profits after tax fell to $7.57bn, down from $10.8bn, while revenues were also lower, falling to $17.65bn, down from $20.75bn. The bank went on to announce a share buyback of $3bn. Stripping out these one-off effects, while net interest margin was lower at 1.59% from a year ago, it was 5bps higher compared to Q4 24. Reported profits at HSBC UK fell by £100m in Q1, falling to £1.71bn, while the Hong Kong business saw profits increase to $6.12bn. from $5.46bn. On tariffs and their effect, the bank said that they had seen significant drops in volume in the US-China trade corridor, saying they expected to see up to $900m in credit losses. The bank said its on track to deliver up to $1.5bn of annual savings by the end of 2026, incurring an initial $1.8bn in severance costs. 

10) BAE Systems H1 25 – 30/07 – one of the best performers year to date this UK defence manufacturer has helped put defence back on the map and confine ESG to the dustbin of history. Formerly British Aerospace, this UK company is a key player in the US, as well as UK when it comes to the manufacture of land, sea and air defence, from support services, to weapons systems and munitions, to surveillance and electronic warfare, as well as flight and engine control systems. The company provides munitions, torpedoes, radars, artillery systems and missile launchers, as well as manufacturing Armoured Multipurpose Vehicles for the US arm. In Q1 the company maintained its full year guidance of a 7% to 9% increase in sales, which would push total revenue above £30bn, with underlying EPS expected to rise by 8% to 10%. Key contract wins so far this year have been $800m with the US Air Force on support services, helping to push the order book up to a record £77.8bn. 

11) Apple Q3 25 – 31/07 – while we’ve seen a strong rebound in the so-called Magnificent 7 stocks in recent weeks the same can’t be said for Apple, where the share price has struggled to get anywhere near to the record highs we saw at the end of last year at $260. In Q2 the company posted revenue of $95.4bn an increase of 5%, and profits of $1.85c a share, or $24.78bn an increase of 8%. The breakdown was as follows – iPhone revenue came in at $46.84bn, Mac revenue of $7.95bn, iPad revenue of $6.4bn and wearables of $7.5bn. Services continued to grow sharply as a share of income rising from $23.87bn to $26.64bn, an increase of over 11%. The main weak spot was wearables which saw revenues decline from $7.9bn a year ago. On sales the Greater China region saw a decline in sales of $370m to $16bn, whereas all other regions saw sales increase. Given the ongoing trade uncertainty between the US and China a slowdown in sales shouldn’t be viewed as too much of a surprise. On the topic of these tensions CEO Tim Cook said uncertainty around tariffs was likely to increase costs for Apple by $900m in the current quarter, while beyond that the outlook is even less clear. The move by Apple to migrate iPhone production away to India will help mitigate some of that but not all as it moves production to lower tariff countries like Vietnam. For Q3 Apple said it expects to see revenue growth of low to mid-single digits from the $85.78bn it saw last year on a gross margin of 46%. Apple also increased its dividend by 4% to 26c a share.

12) Amazon Q2 25 – 31/07 – While Apple has underperformed relative to its peers, Amazon shares have done slightly better, rebounding from their February sell-off, although they haven’t as yet managed to recover all of those losses. The Q1 earnings numbers certainly helped fuel recent momentum, after the company delivered total revenues of $155.7bn, compared to $143.3bn a year ago, and profits of $1.59 a share, an almost 70% increase on Q1 last year. Amazon Web Services saw revenues increase by 17% to $29.3bn. Q2 guidance was a little on the light side largely due to concerns over how much tariffs would erode its margins particularly on the retail business, with this week’s focus likely to be on the success of the recent Prime Day and how much promotions there impacted sales numbers. Net sales are expected to be between $159bn and $164bn, with operating income expected to be lower than consensus at between $13bn and $17.5bn. Consensus was $17.5bn.

13) Microsoft Q4 25 – 30/07 – while the rest of the Magnificent 7 have struggled to regain their previous highs, Microsoft shares have had no such troubles surging past their previous peaks back in May. In Q3 revenues comfortably beat expectations, coming in at $70.1bn, up 15% well above the $68bn forecast and profits of $3.46 a share, that’s $25.8bn. Azure and other cloud services saw revenue growth of 33% while all other business areas saw sizable improvements in revenue. Microsoft cloud revenue added $42.4bn across various different business areas including Personal computing which saw a 6% increase in revenue to $13.4bn. Guidance was also strong with Q4 expected to deliver revenue between $73.15bn and $74.25bn. Azure revenue guidance was increased to between 34% and 35%. Microsoft, like its peers intends to spend heavily on data centres with $80bn earmarked for the current fiscal year, although higher costs could impact this due to tariffs. Capex in the quarter rose 53% to $16.75bn. 

14) Meta Platforms Q2 25 – 30/07 – Meta shares also saw a strong quarter in their most recent quarter. Q1 revenue came in at $42.3bn, a rise of 16% with net income rising 35% to $16.6bn or $6.43c a share. Revenue from FOA came in at $41.9bn, an increase of almost $5bn, generating an income of $21.7bn. The Reality Labs division saw losses increase to $4.2bn. The company also raised its capex forecast for the year to between $64bn and $72bn as it looks to push on with investment in AI. On the outlook Meta said it expects to see Q2 revenue of between $42.5bn and $45.5bn. 

15) Boeing Q2 25 – 29/07 – mercifully for Boeing it would appear that the tragic events in India and the crash of the 787 Dreamliner may have been caused by pilot error if early indications are any guide. The consequence of that is that the shares have recovered pushing to their highest levels since January 2024 in the process. Nonetheless the company’s problems remain far from over, with civil aviation order caps remaining in place for the 737-MAX at 38 per month, with Boeing keen to see that increased to 42. That said, the company has seen some good news. In May BA announced that it had ordered 32 new 787-10 Dreamliners from Boeing at $397m a piece, while the company recently secured a $96bn order with Qatar Airways for 787 Dreamliners and 777X aircraft. The recently announced Japanese trade deal also saw Boeing secure an order for 100 aircraft.