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Week Ahead: Corporate Earnings return in a week that has everything

George Walker, Thursday, 9 July 2020

After a relatively quiet week by 2020’s standards, we’re thrusted right back into the action this week in what’s going to be a hectic few days. From budget statements to CPI releases, interest rate decisions to debt crisis talks, it seems to have everything. And as if that isn’t enough, corporate earnings are also back too. With expectations at all-time lows, there’s potential for some significant market moves should firms miss estimates. Here’s your guide to the markets this week.

A quiet start to the week

An action-packed week ahead starts on a relatively quiet note on Monday as the only notable macro events will be as speech from the Bank of England Governor Andrew Bailey as European markets come to a close shortly followed by the monthly budget statement out of the US.

The high-impact data starts to ramp up as the week progresses with gross domestic product (GDP) out of the UK on Tuesday morning along with consumer price index (CPI) inflation data from Germany before markets open. As the trading day progresses, we also see CPI numbers from the United States as well as a speech from the current Chairman of the Swiss National Bank.

Two of the three central bank interest rate announcements fall on Wednesday. First up, we have the Bank of Japan (BoJ). Last time out, the central bank kept interest rates unchanged at -0.1% but did increase its lending capacity to approximately $1 trillion to assist firms hit by the ongoing pandemic. Rates are not expected to change on Wednesday however markets will want to see if they deem it necessary to ease monetary policy further to support the economy.

Consumer price index data is then released from the UK at 07:00 and New Zealand in the evening at 23:45.

Wednesday afternoon will see the Bank of Canada in focus as they update the markets on their latest interest rate and monetary policy. The BoC has dramatically cut their interest rates over the past number of weeks from 1.75% down to 0.25%. Previous comments from the BoC indicate that they are prepared to do more to boost the economy if needed although no change is expected to the benchmark interest rate at this meeting. Will the accompanying statement and press conference provide clarity on forward guidance?

On the macro front, Thursday could prove to be the most influential trading day of the week. Australian unemployment data is released in the early hours therefore traders of the AUD will need to be mindful of positions held overnight.

Gross domestic product data out of China could be significant to how markets trade on the run up to the European open. Even with current political tensions, China is still considered the engine of the global economy and as a result, any economic expansion or contraction could cause exaggerated volatility given the current global economic situation.

European focus

GBP, EUR and the USD could all be in for a volatile day on Thursday. First up we get unemployment data out of the UK. As with most developed economies, there has been growing concern over the health of the employment market particularly on how the economic lockdown could well have caused irreparable damage resulting in job losses.

As Europe tries to reopen economies, the ECB has a difficult task on their hands. Interest rates are near rock-bottom and they have previously announced an increase in quantitative easing (QE) so the tools in the arsenal to spark a full economic recovery remain limited. It is unlikely we will see further stimulus measures announced at Thursday’s meeting but hopefully, the press conference at 13:30 BST will shed light on the current health of the economy, impact of existing monetary policy and expected rate of recovery.

Initial and continuing jobless claims hit the wires from the US at the same time as the ECB press conference so traders of EURUSD will be in for a busy hour ahead of the US open.

Friday is a big day for Greece and the eurozone as there will be a special emergency summit where EU leaders will meet to discuss and attempt to resolve the current Greek debt crisis. Having missed out on the important tourism industry throughout the summer months, this could be key to maintaining confidence in the eurozone.


Corporate earnings

The coming week is set to be an interesting one as we will be hearing from major US companies as reporting season gets underway. The past quarter has encompassed almost a full lockdown period. Many companies share prices have been propped up by stimulus measures from the Federal Reserve which has attempted to maintain investor confidence.

Now, we will be hearing from the corporations themselves.

Analysts will have factored in the effect the pandemic will have had on earnings so the majority of will come with low expectations and the focus will be on forward guidance.

Just a few of the corporate giants set to announce results this week will be PepsiCo, JP Morgan Chase, Citigroup, Wells Fargo, UnitedHealth, Goldman Sachs, eBay, Bank of New York, Microsoft, Johnson & Johnson, Netflix, Bank of America, Abbott Laboratories, Morgan Stanley and BlackRock.

Many investors sold down positions in these companies once the pandemic took hold and will want to see if tangible figures warrant reinvestment into some of the world’s largest companies.

Whether now is the time to start buying back into these companies will depend largely on their results. Cash balance, forward guidance, dividend pay-out expectations (whether on hold for a short or long term) and share buybacks will all be scrutinised as investors try to decipher which equities are best placed to see out the remainder of the coronavirus effects on trade and recover on the other side.

Individually, these corporate results have the ability to shift sentiment and subsequently move markets as a whole, particularly US indices and can also see large gaps on the market open. With so many on the horizon, be sure to take note when they are expected to report.

All times indicated are BST.


ECONOMIC CALENDAR (all times are BST)

Monday, 13 July

05:30 JPY Tertiary Industry Index
16:30 GBP BoE Governor Baily Speech
19:00 USD Monthly Budget Statement

UK Company Announcements:

Centamin

US Company Announcements:

PepsiCo Inc

ETX Capital Webinar

19:00 Trading Strategy Course 2/4: The Momentum Breakout Strategy

Tuesday, 14 July

02:30 AUD National Australia Bank’s Confidence
02:30 AUD National Australia Bank’s Conditions
03:00 NZD ANZ Monthly Inflation Gauge
03:00 CNY Imports
03:00 CNY Exports
03:00 CNY Trade Balance
05:30 JPY Industrial Production
07:00 GBP Industrial Production
07:00 GBP Manufacturing Production
07:00 GBP Total Trade Balance
07:00 GBP Goods Trade Balance
07:00 GBP Gross Domestic Product
07:00 GER Consumer Price Index
07:00 GER Harmonised Index of Consumer Prices
07:30 CHF Producer and Import Prices
09:00 EUR ECB Bank Lending Survey
10:00 GER ZEW Survey – Economic Sentiment
10:00 GER ZEW Survey – Current Situation
10:00 EUR ZEW Survey – Economic Sentiment
13:30 USD Consumer Price Index
13:30 USD Consumer Price Index Core
13:30 USD Consumer Price Index  ex Food & Energy
13:55 USD Redbook Index
14:30 CHF SNB Chairman Jordan Speech
21:30 USD API Weekly Crude Oil Stock

UK Company Announcements:

AO World
Ocado

US Company Announcements:

JP Morgan Chase & Co
Citigroup IncWells 
Fargo & Company
Fastenal Company

Wednesday, 15 July

01:30 AUD Westpac Consumer Confidence
02:00 AUD HIA New Homes Sales
04:00 JPY BoJ Interest Rate Decision
04:00 JPY BoJ Monetary Policy Statement
04:00 JPY BoJ Outlook Report
07:00 JPY BoJ Press Conference
07:00 GBP Consumer Price Index
07:00 GBP Core Consumer Price Index
07:00 GBP Retail Price Index
07:00 GBP Producer Price Index – Input
07:00 GBP Producer Price Index – Output
09:00 GBP BoE Tenreyro Speech
13:30 USD NY Empire State Manufacturing Index
13:30 USD Import Price Index
13:30 USD Export Price Index
14:15 USD Industrial Production
15:00 CAD BoC Interest Rate Decision
15:00 CAD BoC Rate Statement
15:30 USD EIA Crude Oil Stocks Change
16:00 CAD Bank of Canada Monetary Policy Report
16:15 CAD BoC Press Conference
19:00 USD Fed’s Beige Book
23:45 NZD Consumer Price Index

UK Company Announcements:

Burberry

US Company Announcements:

UnitedHealth Group Inc
ASML Holding N.V.
International Business Machines Corporation
Goldman Sachs Group Inc
U.S. Bancorp
Progressive Corporation
PNC Financial Services Group
eBay Inc
Kinder Morgan
Bank of New York Mellon Corporation

ETX Capital Webinar

19:00 What Is Moving Right Now? Live market analysis

Thursday, 16 July

02:00 AUD Consumer Inflation Expectations
02:30 AUD National Australia Bank’s Business Confidence
02:30 AUD Part-Time Employment
02:30 AUD Fulltime Employment
02:30 AUD Employment Change
02:30 AUD Participation Rate
02:30 AUD Unemployment Rate
03:00 CNY Gross Domestic Product
03:00 CNY NBS Press Conference
03:00 CNY Industrial Production
03:00 CNY Retail Sales
07:00 GBP ILO Unemployment Rate
07:00 GBP Claimant Count Change
07:00 GBP Claimant Count Rate
07:00 GBP Average Earnings Including Bonus
07:00 GBP Average Earnings Excluding Bonus
09:30 GBP BoE Credit Conditions
10:00 EUR Trade Balance
12:45 EUR ECB Interest Rate Decision
12:45 EUR ECB Deposit Rate Decision
13:30 EUR ECB Monetary Policy Statement and Press Conference
13:30 USD Retail Sales
13:30 USD Retail Sales ex Autos
13:30 USD Retail Sales Control Group
13:30 USD Initial Jobless Claims
13:30 USD Continuing Jobless Claims
13:30 USD Philadelphia Fed Manufacturing Survey
13:30 CAD ADP Employment Change
15:00 USD Business Inventories
15:30 USD EIA Natural Gas Storage Change
23:30 NZD Business NZ PMI

UK Company Announcements:

Hays

SSE

US Company Announcements:

Microsoft Corporation
Johnson & Johnson
Taiwan Semiconductor Manufacturing Company
Netflix
Bank of America Corporation
Abbott Laboratories
Danaher Corporation
Honeywell International
Morgan Stanley
PPG Industries Inc
Domino’s Pizza Inc

ETX Capital Webinar

19:30 Crisis Control Webinar Series (from Corellian Trading Academy): TBC

Friday, 17 July

24hr EUR EU Leaders Special Summit
10:00 EUR Consumer Price Index
10:00 EUR Consumer Price Index – Core
13:30 USD Building Permits
13:30 USD Housing Starts
13:30 CAD Retail Sales
13:30 CAD Retail Sales ex Autos
15:00 USD Michigan Consumer Sentiment Index
18:00 USD Baker Hughes US Oil Rig Count

UK Company Announcements:

Homeserve

US Company Announcements:

HDFC Bank Limited
BlackRock Inc
Ericsson

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