Monday 18 July
- – Japanese inflation figures
- – Rightmove UK house price index
- – In the US, quarterly results from Bank of America, IBM and Goldman Sachs
Tuesday 19 July
- – Full-year results from insolvencies specialist Begbies Traynor and Yellow Cake
- – UK unemployment, job vacancies and wage growth data
- – EU inflation
- – US building permits
- – US housing starts
- – In Europe, quarterly results from Novartis, Atlas Copco, Volvo, SGS and Alstom
- – In the US, quarterly results from Johnson & Johnson, Netflix, Halliburton and Hasbro
“Netflix’s shares are down 70% in 2022 and are down by more than three-quarters from their autumn 2021 highs after a stunning fall from grace for a perceived winner during the pandemic and lockdowns,” said AJ Bell investment director Russ Mould and financial analyst Danni Hewson.
“The combination of increased competition and consumers’ cutting back on discretionary spending as higher bills, fuel and energy costs hit home is partly to blame, alongside tighter control of household password sharing.
“Although the share price fall also owes a lot to the very lofty valuation afforded the stock during the pandemic. The desire to pay pretty much anything for growth stocks has dissipated, in the face of two warnings on subscriber growth and higher interest rates”, which Mould and Hewson described as “usually a negative for long-term growth stocks, as higher discount rates lower the long-term value of future cashflows and thus the theoretical value of the equity”.
They added: “Netflix stunned the market in April by announcing it has lost 203,000 subscribers in Q1 and then predicting it would shed another two million in Q2.
“Subscriber additions are therefore the first place that investors and analysts will look, especially if co-chief executive Reed Hastings makes any forecasts for Q3 and beyond. How Netflix manages what it estimates to be 100 million households that are sharing passwords, over and above its 222 million paying household subscribers, will be particularly interesting.”
Sophie Lund-Yates, equity analyst over at Hargreaves Lansdown agrees “there’s a lot riding on Netflix’s results [as] the market has not taken kindly to its downgrading of subscriber targets”.
“Away from the core metric of subscriber numbers and predictions, there will be a watch on Netflix’s content spend. It takes big bucks to stay ahead in this sector, and it will be interesting to see how Netflix is handling the balancing act of being financially responsible and spending enough to create content that keeps customers,” she added.
Wednesday 20 July
- – Trading statements from Antofagasta, Royal Mail, Premier Foods and Costain
“Royal Mail made a rapid recovery in 2021 but its share price has been under significant pressure to the extent that it exited the FTSE 100 at the last reshuffle,” said Hargreaves Lansdown senior investment and markets analyst Susannah Streeter.
“Strike action is the latest problem to rear its head, with managers walking out in a row over pay. This is set to exacerbate the worries about inflation, which are weighing on the stock, with the company warning that stamp prices may have to rise again as it faces a raft of higher prices from energy to labour costs. However, again, increased automation should help it weather the storm.
“Royal Mail’s strong pandemic performance appears to have become unstuck with parcel numbers on the decline. But although volumes have fallen from last year’s highs, they crucially appear to be rebasing at a much higher level than pre-pandemic.
“Royal Mail’s accelerated modernisation drive has also been boosting profitability and the move to greater automation should make the company more flexible to deal with peaks and troughs of demand going forward,” Streeter added.
- – UK inflation
- – German producer price (factory gate) inflation
- – US existing homes sales
- – US oil inventories
- – In Asia, a trading update from semiconductor foundry UMC
- – In Europe, quarterly results from ASML, Kone, Volvo Cars and SKF
- – In the US, quarterly results from Abbott Labs, Texas Instruments, CSX, Baker Hughes, United Airlines, Alcoa and Harley-Davidson
Thursday 21 July
- – First-half results from Howden Joinery
- – Trading statements from Anglo American, SSE, Dunelm, Britvic and 3i
- – Bank of Japan and European Central Bank policy decisions
“The Bank of Japan has held its headline interest rate at minus 0.1% since February 2016. Meanwhile its balance sheet continues to swell as the BoJ keeps running a qualitative and quantitative easing programme that it designed to cap the yield on the 10-year Japanese government bond at 0.25%. The BoJ is not expected to deviate from its current path,” AJ Bell’s Mould and Hewson added.
“Meanwhile the ECB has held its headline deposit rate at zero since March 2016. Its last rate rise came in July 2011. The ECB balance sheet has swollen to a record high €8.8trn thanks to QE, some 90% larger than it was just before the pandemic.
“The ECB is expected to raise rates and embark upon quantitative tightening but president Christine Lagarde is looking to follow up an alphabet soup of prior policy initiatives, such as ZIRP, QE, LTRO and TLTRO with another plan, this time to try and calm southern European bond markets and again do battle with the European dilemma of how to set one interest rate for many countries that have different needs and challenges – even Germany looks to be slowing down right now, judging by its first trade deficit in 31 years thanks to slowing exports and how oil and gas prices have increased import costs.”
- – Flash purchasing managers’ indices (PMIs) for manufacturing and services industries for Asia, Europe and UK
- – US weekly unemployment claims
- – In Europe, quarterly results from Roche, SAP, ABB, Nokia and Vantage Towers
- – In the US, quarterly results from Intel, AT&T, Philip Morris, Newmont, Freeport-McMoRan, Snap and American Airlines
Friday 22 July
- – First-half results from com and Beazley
- – GfK UK consumer confidence
- – Flash purchasing managers’ indices (PMIs) for manufacturing and services industries for US
- – In Europe, quarterly results from Schindler and Swedish Match
- – In the US, quarterly results from Verizon, American Express and Schlumberger