The Week Ahead: UK Retail Sales; Microsoft, Tesla, Vodafone Results

Watch our week forward video preview, learn our choose of the highest tales to look out for this week (20-24 July), and examine our key firm earnings schedule.

On this week’s video, UK chief market analyst, Michael Hewson, appears again on the value motion of the previous couple of days, and appears forward to the newest and public finance numbers, the newest flash PMIs, in addition to the newest numbers from (LON:), (NASDAQ:) and (NASDAQ:). He additionally appears on the key ranges on all these firms, in addition to the 100, , , , and .

Canada retail gross sales (Could)

Tuesday: Retail gross sales in Canada in April, with many of the in lockdown. Like within the US, the reopening of the Canadian economic system prompted an enormous rebound in shopper exercise as lockdown measures had been eased. The newest Canadian have adopted an analogous sample to the US, which means that retail gross sales are more likely to rebound. Whether or not we’ll get the kind of V-shaped rebound we noticed within the US is one other matter given the Canadian economic system’s heavier reliance on the oil and gasoline sector, which has taken an absolute pummelling in latest months.

Snap Q2 outcomes

Tuesday: Again in 2017, Snap was yet one more IPO that promised a lot and delivered little. Since then its share value has primarily stayed under its $17 IPO value, and has solely lately managed to claw its means again, rebounding from lows of slightly below $eight a share in March. Earlier this month the shares hit a file excessive of simply over $26. In 2017 the corporate was haemorrhaging money, and whereas losses have narrowed since then the corporate nonetheless hasn’t made a revenue. In Q1 of this yr (NYSE:) income rose 44% to $462m, with common income per person rising 20%, although losses solely narrowed barely from $310m to $306m for Q1. Snap has been capable of make constructive strikes under the radar as its illustrious rivals like (NASDAQ:) and (NYSE:), obtain all of the political and media scrutiny, and its value may proceed to edge greater. Nonetheless, Snap continues to be no nearer to creating a revenue than it was a yr in the past and given its governance construction stays very a lot a punt, quite than an funding.

UK public sector borrowing (June)

Tuesday: The UK authorities has borrowed over £100bn within the final two months, an distinctive post-war intervention to mitigate the financial shock of the Covid-19 lockdown. Some £47.8bn was borrowed in April, adopted by an additional £54.5bn in Could, because the UK treasury paid the wages of over 9m personal sector workers. The UK authorities has additionally spent over £15bn on PPE to cope with the disaster, greater than its mixed spend on the Residence Workplace and International Workplace. In some unspecified time in the future the UK authorities should work out tips on how to pay for all of this, however with two-year and five-year yields in damaging territory and 10-year yields under 0.2%, they needn’t be too involved proper now. We’re anticipating to see one other massive quantity in June, as the prices of the furlough scheme proceed to rack up, and UK borrowing strikes above 100% of for the primary time since world struggle two.

Microsoft This autumn outcomes

Wednesday: In simply three years, (NASDAQ:) has gone from turning over just below $100bn a yr in income to greater than $141bn, helped by a subscription-based mannequin and an off-the-shelf product providing, which kind of ensures a gradual money movement. A pointy rise in PC demand and an increase in distant working as a consequence of coronavirus can also be more likely to have boosted its earnings when it stories its This autumn and full-year numbers on Wednesday. CEO Satya Nadella acknowledged this shift within the firm’s Q3 earnings report, saying that the digital transformation seen in the previous couple of weeks would usually have taken two years to attain. Microsoft Groups utilization has seen an enormous improve, and cloud-based income now takes up the most important share of the corporate’s quarterly income. Xbox One sale and Sport Move subscriptions may even have seen an increase. Revenue is anticipated to return in at $1.386 a share.

Tesla Q2 outcomes

Wednesday: Current strikes within the (NASDAQ:) share value have been mind-boggling, hitting a excessive simply shy of $1,800 earlier this month. When it comes to market capitalisation, it’s lately been valued greater than Toyota (NYSE:) and Volkswagen (DE:), and the electrical carmaker’s share value is up over 200% yr thus far (and much more for those who value it off the $350 lows in March.) Final yr the corporate turned over $24.6bn, posting a lack of $862m, although its final two quarters had been worthwhile. Since then the corporate has needed to cope with the momentary closure of its automotive vegetation in China and California as a consequence of coronavirus, in addition to diversifying its manufacturing functionality in the direction of its Mannequin Y SUV, along with the extra fashionable Mannequin 3. Having missed out on its 500,000-delivery goal for 2019, expectations had been excessive that the corporate would have the ability to meet its goal for 2020, nevertheless this was earlier than the assorted shutdowns.

The enterprise appeared to have prevented the worst results of the shutdown in Q1, delivering 88,400 vehicles and posting a $16m revenue. On the time administration stated they’d the capability to provide over 100,000 automobiles 1 / 4, earlier than they had been pressured to shut the plant in California, on 23 March. Steps had been taken to chop prices by furloughing workers and reducing manufacturing, with operations finally restarting in Could. Unique steering for 2020 was for a manufacturing goal of over 500,000 vehicles, nevertheless this goal is more likely to be tough to attain given the quantity of manufacturing time misplaced. CEO Elon Musk might be hoping for a repeat of 2019, the place a poor first half was adopted by a bumper second half of the yr. Nonetheless the coronavirus pandemic might produce other concepts. Expectations are for a quarterly lack of $0.57 a share, bringing to an finish a run of three successive worthwhile quarters.

Twitter Q2 outcomes

Thursday: On the finish of 2019 (NYSE:) handed an essential milestone, passing $1bn in income in 1 / 4 for the primary time, largely as results of higher efficiency from promoting revenues. In Q1 this yr these revenues got here beneath strain as firms in the reduction of on advert spend as a consequence of Covid-19. This meant that whereas revenues had been barely greater than the identical quarter a yr in the past, greater prices meant that the corporate swung to a quarterly lack of $7m. The corporate additionally withheld steering in April, over uncertainty about promoting revenues. The corporate received egg on its face final week after some high-profile US political and enterprise figures’ accounts had been hacked by a bitcoin rip-off, inflicting Twitter to need to briefly disable their accounts. Aside from the embarrassment, this occasion poses various questions over Twitters procedures. As we stay up for Thursday’s Q2 numbers, there was unrest amongst some buyers, notably Elliott Administration, in regards to the governance of the corporate to enhance profitability. Whereas a deal was reached on the finish of March that left CEO Jack Dorsey in place, Silver Lake pumped in $1bn, so they may wish to see some bang for his or her buck. The outcomes are unlikely to be reassuring, with a lack of $0.02 a share anticipated, and the prospect of job losses except issues choose up over the remainder of the yr.

Unilever (LON:) half-year outcomes

Thursday: Forward of (LON:) half-year replace, it’s price reminding ourselves that when the corporate reported on Q1 in April, it was a quite combined affair. Coming off the again of difficult circumstances in its Asia markets final yr, private care and residential carried out strongly as Domestos and Cif flew off the cabinets, with gross sales rising 2.4%. Meals and refreshment acted as a drag, declining 1.7%, with ice cream seeing the most important quantity decline, not altogether stunning on condition that we’re popping out of winter. Throughout all of its areas Asia recorded the most important declines, led by China, whereas the Americas had gross sales development of 4.6%. That is unlikely to be repeated in Q2, with the lockdown more likely to have an analogous have an effect on to the one which hit Asia gross sales in Q1. In welcome information for shareholders, the corporate stated it will be paying the dividend of 36p a share. In June the corporate introduced additional cost-savings in making its essential HQ in London, whereas retaining its varied listings in London, Amsterdam and New York, so there may very well be additional particulars on this.

UK, France and Germany buying managers’ index (PMIs) (July)

Friday: Optimism over a rebound in financial exercise took a little bit of a knock in Could’s UK GDP numbers, which , after a 20.4% decline in April. Friday’s newest UK flash PMIs want to indicate a sustained enchancment within the June numbers, given {that a} a lot larger proportion of the UK reopened on 15 June. exercise specifically was very weak, so we actually must see an enormous enchancment on the June PMI of 47.1. was barely higher at 50.1, however for all of the optimism a few V-shaped restoration, the PMI numbers haven’t mirrored that to date.

In and , each forward of the UK in reopening, financial exercise has additionally improved however to not the extent the place optimism a few ‘V’ is warranted. The information from Europe can also be anticipated to enhance, with France presently out in entrance within the latest June numbers, which had been each in growth territory of 52.Three in and 50.7 in . The comparative numbers for Germany in Could had been and respectively.

Centrica (LON:) half-year outcomes

Friday: As dangerous as 2019 was for the share value, there have been additional losses in 2020. In April the shares hit a file low, with CEO Iain Conn lastly departing after a disastrous tenure. Administration minimize the dividend, lastly succumbing to the inevitable. Centrica additionally introduced a £400m minimize to capex, in addition to reducing bonuses for board members, with uncertainty across the monetary impacts of Covid-19 and power value cap blamed for its poor efficiency. The corporate has additionally paused the Spirit Vitality divestment course of. In June plans had been introduced for a less complicated and extra targeted enterprise mannequin, as Centrica appears to embark on yet one more restructuring programme. Three administration layers might be eliminated to create a flatter, much less bureaucratic enterprise as 5,000 roles are misplaced throughout the group. That is anticipated to happen over the remainder of this yr, so progress may very well be mentioned this week.

UK retail gross sales (June)

Friday: The newest British retail consortium gross sales outcomes confirmed the very best numbers in over two years, with a like-for-like acquire of 10.9%. This was largely pushed by an increase in grocery store gross sales, in addition to an enormous improve in on-line spending. This shouldn’t have been an excessive amount of of a shock as the results of the whole lockdown proceed to decrease. Many retailers additionally reopened in mid-June, and that is more likely to have prompted a rebound as nicely. After an 18.1% decline in April, gross sales in Could. Extra of the identical is required in June to assist reverse the -23.2% two-month decline from March and April.

Vodafone Q1 outcomes

Friday: It’s not been a very good final two years for (LON:) shareholders. Shares have misplaced half their worth for the reason that starting of 2018, as a consequence of concern over rising debt ranges and underperformance throughout all of its divisions. This additionally precipitated the corporate to chop its dividend in 2019. In November 2019, the corporate additionally took a £1.9bn loss as a consequence of issues in India, because of a court docket choice that dominated in favour of a authorities demand to pay $4bn, although enhancements in efficiency from South Africa, Italy and Spain led to raised steering. Full-year numbers introduced in Could confirmed group income had risen by 3% to only shy of €45bn, which was barely under expectations. Working revenue rose to €4.1bn, nevertheless most of this was worn out by the large provision final yr for losses at its Indian operation.

The acquisition of cable belongings from Liberty World (NASDAQ:) in Germany boosted annual income, and this could proceed to behave as a tailwind. The completion of the deal to create Europe’s largest towers portfolio with Italy’s TIM has additionally yielded £2.1bn, because it appears to monetise its 61,700 Europe-wide towers infrastructure, which is anticipated to begin including worth from early subsequent yr. The corporate does must take additional steps to cut back debt ranges because it appears to ramp up the roll out of 5G. Vodafone can even face challenges because it strives to compete with BT (LON:) and Telefonica (MC:) in mild of the latter’s deal to purchase the Liberty World UK broadband and TV belongings. In a time of huge consolidations and offers within the telecoms sector, Vodafone continues to be lagging behind its friends, regardless of the latest OPPO deal in addition to the completion of the Vodafone Hutchison-TPG Telecom merger in Australia.

Index dividend schedule

Dividend funds from an index’s constituent shares can have an effect on your buying and selling account. See this week’s index dividend schedule

Chosen UK & US firm bulletins

Firm bulletins are topic to vary. All of the occasions listed above had been appropriate on the time of writing

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