Morningstar
RecommendedMorningstar AwardsWhats New IconETFs Whats New IconIncome Week Whats New IconThematic Investing Whats New IconSign Up to Our Newsletters Open Window Icon
Market Update

What to Expect from the Week Ahead

Business and consumer sentiment surveys, GDP data and full-year results from retail majors will be keeping investors busy ahead of the bank holiday weekend

Morningstar.co.uk Editors 20 May, 2011 | 6:10PM
Facebook Twitter LinkedIn
Font-Size

In the run up to the spring bank holiday weekend, GDP figures on both sides of the Atlantic, as well as business and consumer sentiment surveys, will be the most notable macroeconomic announcements on the agenda.

On Monday, the May batch of Purchasing Managers’ Index surveys will become available for both the manufacturing and services sectors in France, Germany and the eurozone as a whole. On Tuesday, Germany’s May IfO business climate survey is due. The chief distinction between these two studies is that while the PMI compiles forward-looking data on metrics such as new orders, inventories and employment, the IfO is based on a survey of firms’ expectations for the business environment.

Having first digested the business, manufacturing and services climates, investors will have a chance later in the week to hear from consumers. The June edition of the GfK consumer confidence survey, a barometer of consumer expectations for personal finances, the economy, and spending and saving, will be released for Germany on Wednesday and the UK on Thursday.

At the macroeconomic level, Tuesday’s GDP announcement will indicate how the German economy has fared in the first quarter, while second estimates for first-quarter GDP growth in the UK and the US will be out on Wednesday and Friday, respectively. The first estimate of UK first-quarter GDP came in at 0.5% growth quarter-on-quarter. This figure was in line with economists’ expectations and data released since then has not prompted a revision of these forecasts. The situation in the US is more optimistic, according to Morningstar’s Bob Johnson. The latest US job growth revisions prompt him to conclude that the headline GDP number will be revised up as well.

Against the backdrop of consumer confidence surveys and economic growth, retailers Marks & Spencer (MKS) and Burberry Group (BRBY) will update the market on Tuesday and Thursday with their annual results. Investors will be keen to see the outcome of a year in which Marks & Spencer was consistently outperforming peers of the ranks of Next (NXT) and the company’s fourth-quarter trading update revealed a resilient customer base.

Meanwhile, real estate investment trust British Land (BLND) will disclose its annual results this week. Shareholders will be hoping the property group can replicate the above-forecast results released by peer Land Securities (LAND) this week. However, with British Land’s shares having enjoyed a strong run-up in the week ahead of the results, any disappointment could be taken as an opportunity to pocket profits.

Aside from scheduled corporate and economic announcements, investors next week will likely be rattled by the escalating key political and economic debates, which failed to be resolved this week. The future of the IMF is one hot topic, with European and emerging market leaders vying for the director’s chair. The insistence by EU leaders that a European take control of the IMF also highlights the need for--and lack thereof--leadership in Europe on the key question of re-establishing sovereign fiscal stability in peripheral Europe. The latter issue will likely take centre stage during the G8 Summit in Deauville at the end of next week.

Monday
UK Corporate Announcements
British Land Co (BLND) preliminaries , MITIE Group (MTO) preliminaries, Stobart Group (STOB) preliminaries
International Economic Announcements
Japan: Supermarket Sales
Eurozone: France, Germany and eurozone PMI Surveys for Manufacturing and Services for May
US: Chicago Fed National Activity Index for April

Tuesday
UK Corporate Announcements
Big Yellow Group (BYG) preliminaries, Cable & Wireless Worldwide (CW.) preliminaries, De La Rue (DLAR) preliminaries, Great Portland Estates (GPOR) preliminaries, Homeserve (HSV) preliminaries, Marks & Spencer Group (MKS) preliminaries, Pennon Group (PNN) preliminaries, The Paragon Group of Companies (PAG), Victrex (VCT) interims
UK Economic Announcements
PSNCR for April, CBI Reported Sales for May
International Economic Announcements
Eurozone: Industrial New Orders for May, Germany 1Q GDP, Germany IfO Survey for May, France Production Outlook Indicator for May, France Business Confidence Indicator for May
US: New Home Sales for April, Richmond Fed Manufacturing Index for May

Wednesday
UK Corporate Announcements
AVEVA Group (AVV) preliminaries, Brewin Dolphin Holdings (BRW) interims, BTG (BGC) preliminaries, Cable & Wireless Communications (CWC) preliminaries, Caledonia Investments (CLDN) preliminaries, HICL Infrastructure Company (HICL) preliminaries, Shaftesbury (SHB) interims
Ex-Dividend Date
FTSE 100: AMEC (AMEC), International Power (IPR), Next (NXT)
FTSE 250: Dignity (DTY), Euromoney Institutional Investor (ERM), Premier Farnell (PFL), JD Wetherspoon (JDW)
UK Economic Announcements
1Q GDP (second estimate)
International Economic Announcements
Eurozone: Germany GfK Consumer Confidence Survey for June, France Jobseekers Net Change for April
US: Durable Goods Orders for April, Durable Goods ex-Transport for April

Thursday
UK Corporate Announcements
Antofagasta (ANTO) 1Q report, Burberry Group (BRBY) preliminaries, Daily Mail and General Trust (DMGT) interims, Helical Bar (HLCL) preliminaries, London & Stamford Property (LSP) preliminaries, Man Group (EMG) preliminaries, QinetiQ Group (QQ.) preliminaries, Shanks Group (SKS) preliminaries, United Utilities Group (UU.) preliminaries
International Economic Announcements
Eurozone: France Consumer Confidence Indicator for May
US: 1Q GDP (second estimate), Weekly Jobless Claims

Friday
UK Corporate Announcements
Britvic (BVIC) interims, Electrocomponents (ECM) preliminaries, Severn Trent (SVT) preliminaries, Tate & Lyle (TATE) preliminaries
UK Economic Announcements
GfK Consumer Confidence Survey for May
International Economic Announcements
Japan: CPI for April, Retail Sales for April
Eurozone: Germany CPI for May
US: Personal Income and Spending for April, University of Michigan Consumer Confidence for May, Pending Home Sales for April

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

Facebook Twitter LinkedIn
Font-Size

About Author

Morningstar.co.uk Editors  analyse and report on shares, funds, market developments and good investing practice for individual investors and their advisers in the UK.

© Copyright 2024 Morningstar, Inc. All rights reserved.

Terms of Use        Privacy Policy        Modern Slavery Statement        Cookie Settings        Disclosures

The Morningstar Star Rating for Stocks is assigned based on an analyst's estimate of a stocks fair value. It is projection/opinion and not a statement of fact. Morningstar assigns star ratings based on an analyst’s estimate of a stock's fair value. Four components drive the Star Rating: (1) our assessment of the firm’s economic moat, (2) our estimate of the stock’s fair value, (3) our uncertainty around that fair value estimate and (4) the current market price. This process culminates in a single-point star rating that is updated daily. A 5-star represents a belief that the stock is a good value at its current price; a 1-star stock isn't. If our base-case assumptions are true the market price will converge on our fair value estimate over time, generally within three years. Investments in securities are subject to market and other risks. Past performance of a security may or may not be sustained in future and is no indication of future performance. For detail information about the Morningstar Star Rating for Stocks, please visit here

Quantitative Fair Value Estimate represents Morningstar’s estimate of the per share dollar amount that a company’s equity is worth today. The Quantitative Fair Value Estimate is based on a statistical model derived from the Fair Value Estimate Morningstar’s equity analysts assign to companies which includes a financial forecast of the company. The Quantitative Fair Value Estimate is calculated daily. It is a projection/opinion and not a statement of fact. Investments in securities are subject to market and other risks. Past performance of a security may or may not be sustained in future and is no indication of future performance. For detail information about the Quantiative Fair Value Estimate, please visit here

The Morningstar Medalist Rating is the summary expression of Morningstar’s forward-looking analysis of investment strategies as offered via specific vehicles using a rating scale of Gold, Silver, Bronze, Neutral, and Negative. The Medalist Ratings indicate which investments Morningstar believes are likely to outperform a relevant index or peer group average on a risk-adjusted basis over time. Investment products are evaluated on three key pillars (People, Parent, and Process) which, when coupled with a fee assessment, forms the basis for Morningstar’s conviction in those products’ investment merits and determines the Medalist Rating they’re assigned. Pillar ratings take the form of Low, Below Average, Average, Above Average, and High. Pillars may be evaluated via an analyst’s qualitative assessment (either directly to a vehicle the analyst covers or indirectly when the pillar ratings of a covered vehicle are mapped to a related uncovered vehicle) or using algorithmic techniques. Vehicles are sorted by their expected performance into rating groups defined by their Morningstar Category and their active or passive status. When analysts directly cover a vehicle, they assign the three pillar ratings based on their qualitative assessment, subject to the oversight of the Analyst Rating Committee, and monitor and reevaluate them at least every 14 months. When the vehicles are covered either indirectly by analysts or by algorithm, the ratings are assigned monthly. For more detailed information about these ratings, including their methodology, please go to here

The Morningstar Medalist Ratings are not statements of fact, nor are they credit or risk ratings. The Morningstar Medalist Rating (i) should not be used as the sole basis in evaluating an investment product, (ii) involves unknown risks and uncertainties which may cause expectations not to occur or to differ significantly from what was expected, (iii) are not guaranteed to be based on complete or accurate assumptions or models when determined algorithmically, (iv) involve the risk that the return target will not be met due to such things as unforeseen changes in changes in management, technology, economic development, interest rate development, operating and/or material costs, competitive pressure, supervisory law, exchange rate, tax rates, exchange rate changes, and/or changes in political and social conditions, and (v) should not be considered an offer or solicitation to buy or sell the investment product. A change in the fundamental factors underlying the Morningstar Medalist Rating can mean that the rating is subsequently no longer accurate.

For information on the historical Morningstar Medalist Rating for any managed investment Morningstar covers, please contact your local Morningstar office.

For more detailed information about conflicts of interest, including EU MAR disclosures, please see the “Morningstar Medalist Rating Analyst Conflict of Interest & Other Disclosures for EMEA”here

Select Your Site Edition To make sure the site is relevant to you, we need to know if you’re an individual investor or a financial professional.