- US Q4 GDP final – 30/03 – this week’s final reading of US Q4 GDP is expected to see a modest revision upwards to 2.8% from 2.7%, which would be a modest slowdown from the 3.2% seen in Q3. Given how weak consumer spending was at the end of last year it is perhaps surprising that the US economy held up as well as it did at the end of last year. The fall in personal consumption from 2.3% to 1.4% wasn’t a surprise, if anything it was surprising that it didn’t fall further, however the rebound in retail sales in January looks set to more than offset that when the Q1 numbers get released in the next few weeks.
- UK Q4 GDP final – 31/03 – having confounded the doomsters, this week’s final Q4 GDP numbers are expected to show that the UK economy avoided a technical recession, having seen a -0.2% contraction in Q3. The most recent assessment saw the economy stagnate in Q4, helped in some part by a strong rebound in consumer spending due to the Football World Cup in Qatar. Recent retail updates have offered encouragement that consumers are still spending, albeit more cautiously, while the construction sector has also shown signs of some improvement. Business investment also saw a rebound in Q4 after a slowdown in Q3. Even with the optics of avoiding a technical recession the outlook for the UK economy remains challenging with headline inflation still close to 10%, and consumer confidence still very fragile.
- EU flash CPI (Mar) – 31/03 – at its last meeting the ECB raised rates by another 50bps, in line with its previous guidance in January, although the timing was slightly unfortunate as it came in the teeth of a banking crisis that saw UBS absorb its rival Credit Suisse. Against such a backdrop the arguments for taking a more measured approach were quite high, especially since core prices saw a rise to a new record high back in February to 5.6%. Headline inflation has been coming down, falling to 8.5% from 9.2% at the end of last year, however the noises from various ECB policymakers have been becoming increasingly hawkish, although the recent meeting did place much greater emphasis on data dependence. The bigger question remains about what data the ECB is now concerned about, whether it is core CPI or whether their focus has now shifted to financial stability. If we are to believe ECB President Christine Lagarde there isn’t a trade off between the two, however history has taught us that is rarely true. The two are inextricably linked and no central bank will continue to hike rates when financial stability is at stake.
- US Core PCE (Feb) - 31/03 – with the debate ongoing about how sticky inflation currently is, against concerns over financial stability, the Federal Reserve will be hoping that we are closer to the peak for price rises given the concerns over the effects of higher rates are having on the banking system, and more specifically the valuations of banks bond portfolios. In January, US core PCE inflation in January unexpectedly jumped higher to 4.7%, from 4.4%, as did consumer spending after a surge in January retail sales, sending the US 2 year yield up towards 5%. Since then, yields have collapsed on concerns over the stability in the banking system, with US 2-year yields set to see their biggest monthly fall since the financial crisis. While personal spending is expected to slow from the 1.8% gain seen in January the bigger question is whether we’ll see a similar slowdown in headline core PCE.
- Next FY23 – 29/03 – when Next reported at the start of this year the shares reacted positively and have spent most of this quarter pushing up to their highest levels in 12 months after reporting that full price sales grew by 4.8% in the 9 weeks to the end of December, as well as increasing their full year profit before tax guidance by £20m to £860m. Somewhat surprisingly, given the transport related disruption seen over the end of last year, retail saw full price sales rise by 12.5%, while online contributed a mere 0.2% gain. For the rest of the financial year Next says it expects to see full year sales to decline by -1.5%, and profits before tax to fall by -7.6% to £795m. Cost price inflation is expected to peak at 8% in the summer, before slipping back to 6% in H2.
- John Wood Group FY 22 – 28/03 – the last few weeks has seen quite a bit of volatility around the share price of Wood Group as the Aberdeen based oilfield services and engineering company has become the target of private equity fund Apollo Capital Management. Apollo has made four bids for Wood over the past few weeks, all of them rejected, with the latest one at 237p. Back in January the company said they expected full year revenues to come in at $5.4bn, and adjusted EBITDA of around $375m to $385m in line with previous guidance, with a $15m impact due to exchange rate movements. An order book of $6bn with an expectation of between a mid to single digit percentage growth in orders for 2023. Guidance for 2023 is also expected to be in line with previous medium term financial targets.
- Ocado Q1 23 – 28/03 – since Ocado posted its full year numbers at the end of February the shares have come under further pressure over concerns about its ability to grow its revenues, even as it spends more money on new deals. Full year group revenues came in flat at just over £2.5bn, while revenue in its core retail business declined 3.8%, falling to £2.2bn. Losses also widened to £500.8m from £176.9m last year, with the retail business contributing to the bulk of the miss, sliding to an EBITDA loss of £4m compared to a £150.4m profit a year ago. The company blamed higher costs, as well as smaller basket sizes in its JV with M&S, along with the addition of new investment in the expansion of the solutions business. The shares came under further pressure a week later when its US partner Kroger said it would not be rolling out any more fulfilment centres in 2023.
- Carnival Q1 23 – 27/03 – the cruise industry like most in the travel sector has had a difficult three years and having seen a modest stabilisation in the share price in 2021, the shares continued to struggle due to the stop-start nature of the recovery in overseas travel. Over the last 12 months, the shares plunged again, hitting a 30-year low back in October. Since then, early indications suggest we may well have found a short-term base, the shares more than doubling from those lows. In Q4 Carnival posted a smaller-than-expected loss of -$0.85c a share, even as revenues fell short of expectations. Investors appeared to be encouraged by a more optimistic outlook for the upcoming financial year. Carnival said at the time it expected to see Q1 capacity growth of 3.7% and for losses to continue to come down with an expectation that Q1 losses will halve to around $800m. There still remains a long way to go however given that pre-pandemic in 2019, annual revenues were $20.8bn, while last year they came in at $12.17bn. The hope is that 2023 is the year that annual revenues return to the levels they were in 2019, with expectations this current year of $20.99bn.
- Walgreens Q2 23 – 28/03 – when Walgreens reported its Q1 numbers at the start of the year, the shares slipped back, and have continued to decline from the 6-month peaks seen during December. Q1 revenues came in at $33.38bn, due to an increase in demand for cough and flu medicine. Profits came in at $1.16c a share. Despite this Walgreens posted an unadjusted loss of $3.7bn due to a provision of $5.2bn of in relation to litigation the company was required to pay for opioid related litigation after several US states alleged the retailer mishandled prescriptions by overprescribing. Q2 profits are expected to come in at $1.10c a share.
- Micron Technology Q2 23 – 28/03 – Micron Technology has been one of the more stable tech stocks in recent months finding support at $48 and finding resistance at $64. In Q1 Micron reported a loss of $0.04c a share on revenues of just over $4bn which was slightly below estimates. The company also said it would be reducing headcount by 10% during 2023, and that it would also be suspending bonuses. Micron also said it expected to see a $30m charge related to the restructuring, as well as a further loss in Q2 of $0.62c a shar on revenues of $3.8bn.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 70.5% of retail investor accounts lose money when spread betting and/or trading CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money.
Follow us on Telegram
Stay updated of all the news
EUR/USD closes in on 1.0700 amid broad USD strength
EUR/USD came under renewed bearish pressure in the American session and dropped to its lowest level since late March near 1.0700. Stronger-than-forecast PCE inflation data and hawkish comments from Fed's Mester provide a boost to the US Dollar and weigh on the pair.
GBP/USD loses bullish momentum after US data, falls below 1.2350
GBP/USD has reversed its direction and erased a large portion of its daily gains on Friday after the data from the US showed that the annual core PCE inflation edged higher to 4.7% in April. Although the pair clings to small daily gains below 1.2350, it remains on track to end the third straight week in negative territory.
Gold erases daily gains, holds above $1,940
Gold price turned south and declined to the $1,940 area in the American session on Friday. The benchmark 10-year US Treasury bond yield holds stead above 3.8% after stronger-than-expected core PCE inflation data from the US, not allowing XAU/USD to gain traction.
Ethereum price to outpace Bitcoin price as ETH jumps over key hurdle where BTC fumbles
ETH is working on its recovery after it dipped to a two-week low on Thursday. While Bitcoin price has failed to make a similar move and head back above $26,500, Ethereum is outpacing Bitcoin and has been able to push above $1,800.
Ford Stock: New agreement will give customers access to 12,000 Tesla chargers
Ford (F) stock has advanced about 2.5% early Friday following CEO Chris Farley’s announcement that Ford owners will be able to charge their EVs at Tesla Superchargers beginning in early 2024.