UK CPI, Unemployment, Nvidia, easyJet and M&S results

1) UK CPI (Apr) - 20/05 – Inflation increased to 3.3% in March, which while less of a jump than was seen in Europe and the US, was still not welcome. Of more concern was a big jump in PPI input prices which could spell trouble further down the road, whether it be for prices, or in terms of job losses, as business looks to maintain margins. We’ve already seen evidence of increasing cost pressures on businesses in recent PMI numbers despite the latest Q1 GDP numbers which showed the economy grew at a decent 0.6% with activity mainly driven by the services sector. Here cost inflation has been accelerating at its fastest pace since 1996, when records began, while in manufacturing price pressures are rising at their fastest levels since November 2022.  This is a story which still has a long way to run with potentially dire consequences for economic growth and the UK economy heading into the rest of the year.         

2) UK Unemployment/Wages (Mar) – 19/05 – there was a lot of noise made around the fact that unemployment for the 3-months to February, fell from 5.2% to 4.9%. Sadly, the number belied a number of unpleasant cockroaches, and I’m not talking UK government ministers. While many Labour MPs touted the fall as good news for Starmer it was anything but. The fall was entirely driven by a rise in the inactivity rate from 20.7% to 21%, (rising to at least 8m people which aren’t included in the headline numbers) while the number of workers on payrolls dropped by 11k in March, and job vacancies dropped to their lowest levels in 5 years for the period encompassing Q1. On a more positive note, if you can call it that, wage growth continued to slow, with wages excluding bonuses coming in at 3.6%, down from 3.8% in the 3-months to January. Private sector wages also slowed to 3.2% from 3.3% while that in the public sector slowed to 5.2%, from 6%. As we look at this week’s March numbers, the direction of travel is unlikely to change with further weakness in both wages, as well as the labour market expected.              

3) Fed Minutes – 20/05 – does this even matter with the Warsh nomination more or less done and Powell having overseen his final press conference. To recap, the recent meeting saw Fed officials vote to keep rates on hold by 11:1 with Steven Miran once again voting for a cut. 3 other members objected to the inclusion of an easing bias in the statement, while supporting the decision to hold rates. The inclusion of an easing bias in the statement indicates that while the majority of policymakers believe that the next move in rates would be lower, it would appear that some members don’t want to be beholden to that guidance. Beth Hammack of the Cleveland Fed, Neel Kashkari of the Minneapolis Fed, and Lori Logan of the Dallas Fed pushed back on that phrasing, due to concerns over high energy prices having second round effects in the coming months. This theme was reiterated this week by Kashkari when he stated “inflation is too high” and that with the Straits of Hormuz still closed the outlook for inflation remains uncertain, and has made the Fed’s job more challenging. It is hard to imagine what further light the minutes will shine on the outlook for rates, however as long as the labour market continues to hold up the Fed remains unlikely to cut in the near term.

4) UK Retail Sales (Apr) – 22/05 – if this week’s BRC and Barclays retail sales figures are anything to go by then the April retail sales numbers could well be a car crash on an epic scale. Consumer spending fell 0.1% in April, the first annual decline since late 2024. Spending on credit and debit card spending slipped back in April after gaining 0.9% in March, while BRC numbers showed that retail sales fell 3% year on year in April. Both of the surveys showed consumers eschewing big ticket and travel expenditure with Barclays saying that travel spending fell 5.7%, although the timing of Easter may well have also played a part. With concerns about rising energy prices at the forefront of consumer thinking it would appear that many are taking a safety-first approach when it comes to discretionary spending. Having seen retail sales expand at 0.7% in March the prospect of any sort of gain in April remains very much an outlier especially given the sharp increases in various domestic bills that will have kicked in during April and the start of a new tax year.    

5) Home Depot Q1 26 – 19/05 – since reporting their Q4 and end of year results back in February, Home Depot shares have been on a slow decline, sliding to their lowest levels since November 2023, earlier this month. The catalyst for the recent weakness shouldn’t be too surprising coming as it has at around the same time as hostilities broke out in the Middle East. Nonetheless the weakness also came about despite a set of Q4 numbers which were largely better than expected with a 3.8% decline in net sales to $38.2bn. Profits also came in better than forecasts, however the ongoing  unrest in the Middle East has raised concerns about increasing costs of raw materials, as well as concerns about what higher interest rates are likely to have on the housing market, and construction sector. Ordinarily as investors look towards the spring and warmer weather you would expect some level of optimism in what tends to be a strong next couple of quarters for the US largest DIY retailer. Thus far there doesn’t appear to be much prospect of that given recent share price weakness, which suggests that perhaps the shares could be due a rebound. When looking at online sales as well as comparable sales recent quarters have been positive which suggests the recent gloom may well be overdone as the shares head towards levels last seen in late 2023. For 2026 Home Depot says it hopes to open 15 new stores, and a gross margin of 33.1%. Total sales for 2026 are expected to grow between 2.5% and 4.5%, with comparable sales to range from flat to +2%.   

6) Nvidia Q1 27 – 20/05 – when Nvidia reported at the end of February, we were witness to another set of blowout numbers with Q4 revenue of $68.13bn, up 30% on Q3, and 73% Y/Y. Data Centre revenue surged to $62.3bn, with profits coming in at $1.76c a share, and net income increasing 94% year over year to $43bn. Full year revenue came in at $215.9bn, an increase of 65%. Gross margins rose to 75% for the quarter, with full year margins coming in at 71.1%. For the outlook, revenue for Q1 2027 was estimated to rise to $78bn, +/-2%, assuming no data centre revenue from China, with margins set to remain steady at 75%. Despite this the shares fell sharply, as once again concerns about a bubble along with concerns over supply chain risks prompted some caution and profit taking. While these concerns initially saw the shares fall to a 9-month low in March, they didn’t last long, with the shares recently hitting fresh record highs this month. This in spite of the ongoing closure of the Straits of Hormuz, which remains a key conduit for helium and sulphur, and which is a key component in chip making. Investors appear almost indifferent to the prospect that this will lead to either chip shortages, or even more expensive hardware, at the expense of margins.  

7) Marks & Spencer FY 26 – 20/05 – it’s been a bit of a roller coaster ride for Marks & Spencer shares this year, starting the year around 320p, before surging to as high at 410p just before the commencement of hostilities in the Middle East, before sliding back to the lows of the year towards the end of March, and the cyberattack lows. This is where they are currently languishing as concerns about UK consumer spending weigh on sentiment. When M&S reported in January and their post-Christmas update it was very easy to argue that the retailer was still absorbing the effects of the cyberattack last year, which means that a lot of bad news is already baked into the share price. As a result, the share price saw a decent lift in the wake of its Q3 results, which saw group sales rise 24.2% to £4.99bn, driven by a strong performance from its food business which saw total sales rise 6.6% to £2.7bn, while on a LFL basis they rose 5.6%. There was a moderate decline in its general merchandising business of 2.5% to £1.27bn largely due to a weak consumer backdrop, as well as lingering impacts from the cyberattack, as customers slowly returned. M&S kept its full year guidance unchanged with little indication in the months since then they expect to fall short of that guidance.

8) Target Q1 26 – 20/05 – are we finally starting to see a turnaround story for Target? Judging by recent share price performance that could well be the case, having seen the shares rally from 6-year lows in November 2025. In that time having found a base at $83.50 the shares have risen to as high as $133 back in April, before seeing a modest retreat from those levels. This rebound has come about despite a weak set of Q4 numbers, back in March which saw revenue and store traffic decline in what should be a strong quarter for the retailer. Despite these trends revenues came in line with forecasts at $30.45bn, while profits were slightly ahead of expectations at $2.44 a share. Furthermore, new CEO Michael Fiddelke who started 1^st February, said that sales momentum was starting to show signs of turning around, and that full year profits for 2026 were expected to be between $7.50 and $8.50 a share, as it looks to turn around a trend that has seen shoppers go elsewhere due to controversial social stances on DEI and led to market share losses. Same store sales are still trending below the industry average of -2.5% at -3.9%, while website transactions have also struggled. Fiddelke also said he would be looking to update some of the store real estate which has been variously described as tired and stale, with a commitment to spend $5bn this year to help in the turnaround plan in remodelling 130 stores as well as opening 30 new ones.            

9) BT Group FY 26 – 21/05 – when BT reported in February the shares popped higher before slipping back modestly and have since continued the upward progress they've been on over the past 2 years. In Q3 the telecoms group reported a 4% decline in revenue to £5bn, with UK adjusted service revenue slipping by 2%. Pre-tax profits also slowed, slipping to £183m, largely due to £214m in losses from its sports joint venture with WBD. On the plus side Openreach saw a 21% increase in FTTP connections to 8.2m premises connected, pushing the market share to 38%. At the time BT said it is on track to meet its full year guidance.

10) Walmart Q1 27 – 21/05 – Walmart shares took a hit back in February, slipping from record highs when they reported their full year numbers, and have only really started to recover in the last few weeks or so. The US’ biggest retailer reported guidance that came in short of expectations, as new CEO John Furner took the reins in his first earnings report. The Q4 numbers were solid with revenues of $190.66bn, a rise of just over 5% on last year, while profits came in at 74c a share. When adjusted for one off items, Walmart profits actually fell to 53c a share. Global ecommerce sales increased by 24%, with the US seeing a 27% increase, while gross margins rose 13bps. US same store sales rose by 4.6%, however for 2027, net sales guidance came in light at between 3.5% and 4.5%, with full year profits expected to come in between $2.75 and $2.85 a share, which was well short of what many had been expecting. Despite gasoline prices remaining high Walmart is well placed to ride out the increases in the cost-of-living through its own branded gasoline station convenience stores, however it’s still unlikely to escape completely as consumers become more discerning, as well as cautious in their spending habits.

11) easyJet H1 26 – 21/05 – with fuel prices seeing sharp increases the travel sector is likely to face many challenges in the weeks and months ahead, with many airlines already cancelling flights due to escalating prices, and that’s before you look at travellers cancelling their own travel plans over concerns, they might have trouble getting back. In April easyJet warned that the increase in fuel costs was going to shave £25m off its profits, as the airline warned of an H1 loss of between £540m and £560m. At the time trading was in line with expectations. On bookings Q3 was said to be 63% sold, which was down 2% on last year, with Q4 30% sold, also 2% down on last year. On the other hand, easyJet holidays for H2 are 67% sold, while fuel is 70% hedged for H2 at $706 per metric tonne, with the current price more than double at over $1,500. Every $100 move in fuel equates to $40m in costs, up or down.