Monday 22 August
- -Interim results from Phoenix Holdings Group
- -Canada house price index
- -Hong Kong CPI
- -In Europe, quarterly results Vista Alegre
- -In the US, quarterly results from Palo Alto, Nordson and DLocal
Tuesday 23 August
- -Half year results from John Wood Group
- -Interim results from Aferian
- -Flash PMI data UK, US, EU, Germany, France, Japan
- -US new home sales
- -In Asia, quarterly results JD.Com
- -In the US, quarterly results from Intuit, Medtronic, Macys, Nordstrom and Urban Outfitters
Wednesday 24 August
- -Interim results from Anglo Pacific Group
- -US oil inventories
- -In the US, quarterly results from Nvidia, Royal Bank of Canada, Williams Sonoma, Victoria’s Secret, Guess and Zoom Technologies
It’s been a rough ride for Nvidia this year. Earlier this month, the US chipmaker warned its Q2 sales would miss the mark, following a slump in demand for graphics cards. Revenue for the quarter is now expected to come in at $6.7bn, 19% lower than the record breaking $8.3bn raked in the previous quarter.
AJ Bell investment director Russ Mould notes the industry as a whole is starting to feel the squeeze of slowing economic growth, with competitors Micron and Intel issuing similar warnings in recent weeks.
“Consumers wrestling with raging inflation won’t be considering big ticket purchases. Upgrades to hardware and smartphones will be delayed and it will become harder and harder to justify spending on those nice-to-haves like new games.”
Nvidia’s shares have fallen 38% so far this year, however, they have bounced back 7% since the profit warning, which suggests investors may be willing to look past the inflationary headwinds. Unlike in the UK, inflation in the US has shown signs of cooling, with the Consumer Price Index (CPI) falling back to 8.5% in July after likely peaking at 9.1% in June.
Moving forward, Mould said it is key the company keeps tabs on how it is managing excess inventory and ensure it is making “the right kind of chip”. “There may currently be a glut of memory chips, graphic cards and PC processors but there’s still spotty supply for the automotive and industrial markets.”
Thursday 25 August
- -Full-year results from Hays and Morses Club
- -Interim results from Faron Pharmaceuticals, Pure Tech Health, Macfarlane Group, Hunting and Grafton Group
- -Quarterly results Benchmark Holdings
- -Germany GDP
- -US preliminary GDP
- -US weekly unemployment claims
- -UK car production figures
- -US weekly unemployment claims
- -US Jackson Hole Economic Symposium begins
The macro backdrop has evolved dramatically since Federal Reserve chair Jay Powell claimed inflation was “transitory” at last year’s jamboree. Investors will be looking to the Fed for answers on the strength of the economy, the size of future interest rate hikes (following two consecutive 75bps increases) and how quickly it plans to reduce its $9trn balance sheet.
After Powell adopted what was perceived to be a more dovish tone at a 27 July conference, equity and bond markets took and ran with it and rallied hard. But even though inflation in the US has shown signs of softening, that doesn’t mean further big rate hikes are off the table.
Kevin Thozet, member of the investment committee at Carmignac, thinks Powell will probably aim for a message of “slower for longer” when he convenes with policymakers at Jackson Hole.
“However, risks remain that markets will ease financial conditions further if they focus to a greater extent on the first part of that message, causing more pain down the line when the ‘longer’ part plays out.”
There is also a possibility that the Fed boss could toy with the interpretation of ‘neutral rates’, Thozet added, “so that the level of interest rates considered neither accommodative nor restrictive could be nuanced to adjust to changes in financial conditions or because of a high inflation backdrop”.
“Indeed the 2.5% theoretical neutral rate level assumes 2% long-term inflation; with US inflation at 8% or so, neutrality is likely above 2.5%. As such, Jackson Hole could provide the opportunity for Powell to outline the market’s complacency in placing terminal rates so low and expecting such a sudden shift in monetary policy stance. And that a potential slower (yet longer) tightening cycle does not signal the green light for softer financial conditions.”
- -In Europe, quarterly results from Fortum Oyj
- -In Asia quarterly results from Pinduoduo
- -In the US, quarterly results from Dollar Tree, Dollar General, VMware, Workday and Coty Inc
Friday 26 August
- -UK energy price cap revealed
Ofgem is expected to hike the price cap on Friday, as consumers face one of the worst cost of living crises in recent memory. It is estimated the change, which will be implemented in October, could see the bills for the average household jump from £1,971 to £3,582. By January, that figure is expected to climb above £4,000
Ofgem initially introduced the price cap in 2019 to protect consumers who were being overcharged by suppliers. But now it is being accused of putting the interests of energy companies first.
Earlier this month, Ofgem said it would make changes to the energy price cap every quarter instead of every six months. While it argued this would prevent another widescale crisis in the energy retail sector, critics countered the change in methodology will create more short-term pain for already beleaguered households.
Some of the UK’s biggest energy suppliers, including Centrica and Octopus Energy, have voiced support for a proposed government-backed emergency funding package that could freeze customer bills for two years.
- -EU M3 Money supply
- -US trade balance
- -US Michigan Consumer Sentiment
- -US personal income and spending numbers
- -In Asia, quarterly results from Meituan
- -In the US, quarterly results from Marvell and Dell