Weekly outlook, 2-6 November: FTSE heavyweights in spotlight as election day arrives
It’s election day at last, and while the outcome of Tuesday’s vote in the US will drive the headlines for much of this week and beyond, there’s still a full slate of results and economic updates in store for UK markets.
With coronavirus cases now surging at an alarming rate, Boris Johnson has announced a new month long lockdown, which will come into effect on Thursday.
With hospitality venues and non-essential retailers to shut as a result, it could prompt a return to the economic collapse of March’s initial lockdown.
Here’s a rundown of the biggest updates due to hit the markets this week.
Ryanair half year results – 2 November
On Monday the Irish carrier will release its half year results – a period encompassing the worst six months in the history of the aviation industry.
Back in October the airline cut capacity by 20 per cent heading into the typically tight winter season, blaming the decision on governmental “mismanagement” of the quarantine situation.
Boss Michael O’Leary has been typically forthright throughout the entire crisis, so sparks could fly again on Monday – especially given the decision to ban all international travel for the next month.
Later in the week Wizz Air – one of the few “success stories” of the pandemic will also provide a trading update.
Associated British Foods (ABF) full year results – 3 November
The Primark owner will confirm whether it has successfully shaken off the three-month store closure enforced by lockdown on Tuesday.
Off the back of a stunning fourth quarter it said that full year profit was headed for £350m – the top end of previous forecasts.
Without a digital presence of note, such a result would be a feather in the fast fashion house’s cap, even if clouds remain on the horizon, according to Hargeaves Lansdown analyst Susannah Streeter.
“The change in our shopping habits, as more people work from home and international tourism takes a nose dive, has hit large destination stores hard”, she warned.
Marks & Spencer half year results – 4 November
High street stalwart M&S comes to the market for the first time since August’s bombshell announcement that 7,000 jobs would be axed in a massive restructuring push.
The British brand came into the pandemic under a cloud and at the last update it said that sales had crashed a fifth.
However, it has subsequently launched a partnership with delivery darlings Ocado, and is looking forward to its “most digital Christmas ever”.
Says CMC Markets’ Michael Hewson: “The shares have fallen over 10% since the [last] update so you have to think the bar is low for an upside surprise, and the beginning of a possible move back to levels last seen in the middle of August”.
Astrazeneca Q3 trading update – 5 November
In a year most firms would like not only to forget, but to banish to the darkest recesses of their memory, the pharma giant is one of few firms to have seen its share price rise.
Making drugs in the middle of a pandemic obviously helps, and of course, being one of the leading candidates to develop a coronavirus vaccine has pushed Astra to a new prominence.
But beyond the headline-grabbing news, investors will be looking closest at the blue-chip’s pipeline of future drugs, says AJ Bell’s Russ Mould.
“The pipeline is key as that represents the future. Remember that at the first-half stage, ten drugs generated $4.6 billion of sales, or nearly three-quarters of the total”, he notes.
Bank of England MPC interest rates decision – 6 November
On Friday the policy wonks at the Old Lady of Threadneedle Street will decide what do with interest rates as the country battles a second wave of coronavirus cases.
Last week the European Central Bank (ECB) left rates on hold, and economists think that the Monetary Policy Committee (MPC) will likely follow suit.
However, it is likely that they’ll reload the central bank’s quantitative easing programme with an extra £100bn.
That would take the bond buying package up to £845bn, meaning they could keep buying bonds at roughly the current rate until the early summer.
In addition:
- Labour leader Sir Keir Starmer makes his first appeal to business at the CBI conference (Monday, 2-4 November)
- UK PMIs: Manufacturing (2 November), Services (4 November), Construction (5 November)
- Federal Reserve interest rate decision (5 November)
- Results from: Hiscox, DS Smith, Weir Group, Morgan Sindall, Trainline, Sainsbury’s, Tate & Lyle, Biffa et al…