Week ahead: US CPI likely to pressure US Retail Sales in April

US CPI (Apr) - 12/05 – The big surge in gasoline prices by 21.2% during March saw US inflation surge from 2.4% in February to 3.3%, thus complicating the outlook for the Federal Reserve when it came to its recent interest rate decision to hold rates at 3.75%. While the surge in energy prices was the main talking point for the March print the main concern policymakers will have is whether this surge in prices will start to lead to second and third round effects further out. There was little sign that core inflation was seeing any effects from recent events, however if that were to happen it would more than likely start to be seen in the next few months given that core prices tend to act with a lag. Nonetheless April CPI is still likely to be higher than it was in February, despite gasoline prices slipping back from their recent peaks due to the ceasefire. This suggests that while we saw a big surge in the March numbers, we probably won’t see too big a difference in the April numbers.    

US Retail Sales (Apr) – 14/05 – Never bet against the US consumer has generally been a consistent mantra when it comes to US retail sales. At the start of the year US retail sales saw a sharp slowdown which was impacted by the very cold weather which swept across the north and east of the country. A weak January print is nothing new in the US with similar weak readings in 2024 and 2025 so the number wasn’t a surprise. For February the 0.7% gain was the best in 7-months and was driven by department store sales, as well as clothing and sporting goods and book store sales. There were pockets of weakness including food and beverage sales and furniture stores, while in March there was an even larger improvement with a 1.7% gain, although a lot of this was driven by a surge in gasoline receipts which rose 15.5%. The core measure rose 0.4% which was still pretty solid and above expectations. Whether this momentum is maintained in April is up for debate, given low levels of US consumer confidence, however the resilient nature of the US labour market ought to offer some level of support.               

UK Q1 GDP – 14/05 – What can Q1 tell us about how the UK economy is likely to perform over the rest of the year. In reality, not much. The most recent monthly GDP numbers would appear to suggest a rebound in economic activity during January and February, while more recent data in March might suggest that some economic activity has been pulled forward in anticipation of steep price increases on imported goods as the crisis in the Middle East drives import costs sharply higher over the rest of the year. At the most recent monthly GDP numbers for February, we saw a sharp increase of 0.5%, the best monthly gain since January 2024. The improvement also came after a weak series of monthly gains since a 0.2% expansion in November. Nevertheless, it is still welcome with strong growth in services which saw output expand by 0.5%. Construction also had a good month, rising 1%, even though on a rolling 3-month basis it remains firmly in negative territory at -2%. So how to explain this given the widespread concern about the strain on private sector business. There could be an element of a mechanical rebound after the subdued end to 2025, which saw business hunker down ahead of the November budget. We’ve also seen a rebound in car manufacturing, again a mechanical rebound given the JLR shutdowns in H2 of last year. We could also be looking at a seasonal element given that in 2024 and 2025 the UK economy proved to be more resilient than H2, probably due to business getting ahead of adverse April tax changes. January was also revised up to 0.1%. Despite the good news about the economy this data pre-dates the outbreak of hostilities in the Middle East which has driven energy prices higher and is likely to cascade down through supply chains in the coming months, and into the monthly March numbers, which could go either way. We could see a further improvement as companies bring forward their business ahead of sharp price increases, or we could see some consumer hunkering down.       

Vodafone FY 26 – 12/05 – Having slipped to a low of 62p back in April last year, Vodafone shares have been a strong run in the 12 months since then, rising to a 3-and-a-half-year high this year. That momentum did briefly sputter at the end of Q3 after a disappointing quarter for the UK business, which saw organic service revenue slide by -0.5%. Operating profits also slowed sharply, down 52%, coming in at €483m, down from €1.14bn in Q2. Group service revenue growth came in at 5.4%, down modestly from 5.8% in Q2. While group total revenue was higher at €10.45bn, this improvement was driven by the continued integration of Three, which has boosted the numbers, pushing UK total revenue up to €2.44bn from €1.86bn in the same quarter last year. Despite the disappointment over the slowdown in Q3, Vodafone reiterated its full year guidance saying they expect to deliver the upper end of EBITDA ranges of €11.3bn to €11.6bn, with another €500m share buyback, as well as saying they expect to grow the annual dividend by 2.5%. This helped limit the downside with the shares subsequently recovering to match the recent peaks seen in February. Since then, Vodafone has sold off its 50% stake in VodafoneZiggo to Liberty Global for €1bn in cash, and a 10% shareholding in a new Ziggo Group. This month we also got an announcement that Vodafone also agreed to acquire the remaining 49% stake in Three for £4.3bn, from CK Hutchison, as it looks to focus its energies on two key markets, that of the UK and Germany. The deal is expected to deliver up to £700m in cost synergies by 2030.

Greggs Q1 26 – 12/05 – It’s not been a particularly great start to the year for the Greggs share price, having undergone a strong rebound post budget at the end of last year, the shares are down sharply from their January peaks of 1,776p. The rot set in soon after the bakery chain reported its Q4 pre-Christmas trading results which were pretty solid and in line with guidance. It was the outlook that prompted markets to send the shares lower, the firm citing rising economic uncertainty for its decision to cut capex to around £200m in 2026. When Greggs reported its FY numbers in March there was a 17.9% fall in statutory profits before tax to £167.4m, despite a 6.8% increase in total sales of £2.15bn. This was due to increases in costs which reduced underlying profit margin by 100bps to 8.7%, due to an increase in like for like cost inflation of 5.5%, driven primarily by increased employers NI contributions and rising costs of food and packaging. Energy costs were also higher. On the outlook Greggs said they expect slightly lower input cost inflation of around 3%, although this could get revised upwards given recent events in the Middle East. In March Greggs said they expected profits for 2026 to be in line with 2025, with any improvement contingent on a recovery in the consumer backdrop. Given recent events and the collapse in consumer confidence there is considerable downside risk to this outlook which appears to be being reflected in recent share price performance.   

Burberry FY 26 – 14/05 – Another retailer that has struggled to move beyond the levels we saw towards the end of 2025, the shares have drifted lower from their peaks at the start of the year. We have seen a modest rebound from the 10-month lows seen in March; however, the consumer outlook still remains uncertain. At the end of Q3 the fashion retailer reported a 1% increase in retail revenue to £665m, with a 3% increase in comparable store sales. By region there were significant improvements in Asia Pacific and Greater China of circa 5%, while EMEIA lagged with 0% change. Guidance for full year profit was kept in line with consensus which is currently for annual group revenue of £2.43bn, and adjusted operating profit of £154m. For Q4 comparable retail sales are expected to see an increase of 5%.

ITV Q1 26 – 14/05 – It’s been several months since reports that Sky owner Comcast was in talks with ITV to buy its Media and Entertainment business, with little in the way of progress since then. If anything, there’s been radio silence since those reports back in November with the shares trading sideways, albeit at slighter higher levels then they were pre the reports. The reports were all the more surprising at the time given that recent takeover speculation has tended to revolve around its ITV Studios business. The price tag has been reported to be in the region of £1.6bn. When ITV reported its full year numbers back in March the shares staged a modest rebound after a better-than-expected Q4 performance, driven primarily by the ITV Studios business. Here total revenues increased 5% to £2.13bn, while the M&E business saw revenue decline by 5% to £1.99bn. Total Group revenue came in £19m lower than the previous year at £4.12bn. Statutory profits before tax fell 35% to £338m. For 2026 expectations are high that the World Cup will be able to deliver a significant boost to the advertising business. As far as the M&E business is concerned ITVX and digital advertising has continued to offset the weakness in the analogue advertising part of the business. ON the outlook for 2026 management expressed confidence that ITV Studios along with ITVX would continue to drive growth, with revenue, margin and profit weighted towards H2. ITVX monthly active users were at 16.5m, up from 14.7m in 2024. ITV also said it was looking to make a further £20m of additional savings in 2026, on top of the £63m in 2025, as well as spending £1.225bn in content spend.         

Cisco Systems Q3 26 – 13/05 – With the shares currently at record highs this US company is at the forefront of the AI infrastructure buildout given its role as the nuts and bolts of the Internet and AI delivery story. In Q2 the company reported a 10% increase in total revenue of $15.3bn, with product revenue up 14% at $11.6bn. Its Networking revenue was up by 21% with the company reporting significant momentum in AI saying that it expects AI orders to exceed $5bn this year alone. Full year revenue guidance was raised to between $61.2bn and $61.7bn. The rising prices in product components could be a factor in this latest set of numbers, as it looks to meet demand from the likes of smaller cloud companies.