Monday 1 August
- – First-half results from Ascential, Pearson, Spectris, Senior and HSBC
With its shares up roughly 30% over the last year, HSBC is on stronger footing than rival UK banks such as Natwest, which is up around 15%, and Barclays and Lloyds, which are down 5%. Fellow Asia-focused bank Standard Chartered is giving it a run for its money, however, with shares up a third over the past 12 months.
AJ Bell investment director Russ Mould and financial analyst Danni Hewson attribute the divergence to “hopes that China will rebound quickly, as lockdowns end and government stimulus measures kick in”, while fears the UK is headed into a recession are weighing on the more locally focused trio of banks.
HSBC is forecast to make headline pre-tax profit of $14.7bn (£12.1bn) for 2022, as a whole, which would be a 22.2% drop from the $18.9bn over the previous year. “Analysts do then expect a big step up in 2023 and 2024, presumably to reflect the growth potential of the bank’s core Asian markets,” Mould and Hewson added.
The headwinds of H1 2022 mean estimated pre-tax profit of £8.2bn is expected, down from the $10.8bn achieved in the same six months last year.
Hargreaves Lansdown equity analyst Sophie Lund-Yates described HSBC’s profits so far this year as “underwhelming”.
“The Chinese property market has a large part to play in this. As China’s property development stalls and house prices fall, the upcoming results will indicate the additional impact the sector has had on profits. As a reminder, last quarter HSBC absorbed a $160m charge for expected credit losses due to a slowdown in the Chinese property market.
“HSBC have also signalled more share buybacks are unlikely for 2022 due to a weakening of its required capital position. Investors should not be holding their breath for a return of share buybacks until this issue is resolved,” Lund-Yates added.
- – Manufacturing purchasing managers’ indices (PMIs) in Asia, Europe, UK and USA
- – In Europe, quarterly results from Heineken
- – In the US, quarterly results from ActivisionBlizzard, Simon Properties, CF Industries, Pinterest and Lattice Semiconductor
Tuesday 2 August
- – First-half results from BP, Travis Perkins, Fresnillo, Greggs, Direct Line and Coats
BP will “continue to reap the reward of elevated oil prices in the second quarter with healthy profits expected this time round”, said Hargreaves Lansdown equity analyst Laura Hoy.
“[It] has promised further share buybacks to the tune of $2.5bn in the second quarter, as they aim to return a portion of surplus cash flow to investors. Though no shareholder returns are guaranteed.”
She added: “BP’s exit from Russia will also be on investors’ minds, although the bulk of the impact has likely been priced in. The group’s decision to sell off Rosneft is the right one, but eager buyers are not expected to emerge anytime soon. That means continuous write-down are anticipated as the value of this asset declines.”
- – Trading statements from Sage and Virgin Money UK
- – Interest rate decision from the Reserve Bank of Australia
- – US Job Openings and Labor Turnover Survey (Jolts)
- – US monthly car sales
- – In Europe, quarterly results from Ferrari and Siemens Gamesa
- – In the US, quarterly results from AMD, PayPal, Caterpillar, Starbuck’s, Airbnb, Uber, Electronic Arts, Microchip and KKR
Wednesday 3 August
- – First-half results from Taylor Wimpey, Hiscox and Just Eat Takeaway.com
- – Trading statements from Fresnillo and Wizz Air
- – Service industry purchasing managers’ indices for Asia, Europe, the UK and USA
- – EU factory gate (produce price index) inflation
- – US factory orders
- – US oil inventories
- – US ADP payrolls survey
- – In Japan, quarterly results from Nintendo
- – In Asia, quarterly results from Kweichow Moutai
- – In Europe, quarterly results from Siemens Healthineers, BMW, AP Møller-Maersk, Infineon and Société Générale
- – In the US, quarterly results from CVS, Moderna, Ford, Yum! Brands and Clorox
Thursday 4 August
- – First-half results from Rolls-Royce, Glencore, Hikma, Serco, Mondi and Meggitt
- – German factory orders
- – Bank of England interest rate decision
Hot on the heels of a 75bps hike by the US Federal Reserve and a bigger-than-expected 50bps increase by the European Central Bank, it is the turn of the Bank of England to reveal its next base rate decision.
“At the meeting back in June, the monetary policy committee (MPC) voted 6-3 for a one-quarter point increase in the base rate to 1.25%. That was the fifth straight increase but note that the three dissenters – Catherine Mann, Jonathan Haskel and Michael Saunders – voted for a half-point increase,” said AJ Bell’s Mould and Hewson.
“Governor Andrew Bailey (pictured) voted for a quarter-point advance although he has started to warn of the possible need for a half-point increase this time around, especially as inflation is running at more than four-and-a-half times the bank’s 2% target, based on the consumer price index.”
Sterling weakness is a concern, but the BoE seems to still be giving greater weight to its inflation priorities.
“As a result, markets are putting an 87% chance on a 50bps increase to 1.75% at this meeting, with increases in September, November and December taking us to 2.75% by year-end,” Mould and Hewson added.
“However, markets are starting to price in a peak around 3% and the possibility of a cut at some stage in late 2023, which may be their way of saying that just as the bank was too late to start raising, the increased risk of a recession means it could be too late to start cutting again.”
- – UK construction industry purchasing managers’ index (PMI)
- – US Challenger, Gray and Christmas monthly job cuts survey
- – US weekly unemployment claims
- – In Japan, quarterly results from Toyota Motor
- – In Asia, quarterly results from Alibaba
- – In Europe, quarterly results from Novo Nordisk, Bayer, Adidas and Beiersdorf
- – In the US, quarterly results from Eli Lilly, DoorDash and Kellogg
Friday 5 August
- – First-half results from WPP and Capita
- – Trading statement from London Stock Exchange
- – Halifax UK house price index
- – US monthly non-farm payrolls, unemployment rate and wage growth
- – In the USA, quarterly results from Liberty Broadband and Formula One
- – US PCE index
- – In Europe, quarterly results from Hermes, BNP Paribas, ENI, Swedish Match and Renault
- – In the US, quarterly results from ExxonMobil, Procter & Gamble, Chevron and ConocoPhillips