Tuesday preview: US Producer prices, ABF in focus

by | Nov 9, 2021

Tuesday’s main data point will be published in the US, where the Department of Labor is scheduled to release wholesale price figures covering the month of October.

Investors will also be keeping tabs on any policy-relevant remarks out of Fed boss Jerome Powell at a joint Fed, ECB and BoC diversity conference, from 0900 GMT onwards.

Across the Channel, the spotlight will be on the ZEW institute’s economic confidence index for Germany in November. Several top European Central Bank officials are also due to take to the podium, including President Christine Lagarde.

No major economic reports are due out in the UK.

On the other side of the world, Chinese money supply figures may be released from Tuesday onwards.

Among the UK corporates due to update investors on Tuesday is Associated British Foods, which is scheduled to post full-year figures.

UBS analyst Olivia Townsend has penciled-in adjusted operating profits, before repayment of JRS monies, of £1.07bn. Including JRS, profit was seen coming in at £975m, with Grocery seen contributing £419m and Primark another £298m.

Investors’ focus would be on the degree of further improvement in trading at Primark since the time of the last update and any comments around inventory availability, cost inflation and whether there are any plans to pass those increases onto customers, she predicted.

Indeed, she attributed the recent sell-off to investors’ perception that Primark had scant pricing power.

Guidance for the 2022 financial year would also be key.

Townsend forecast full-year group sales of £16.25bn and £1.53bn of operating profits, with Primark revenues seen 39% higher to £7.81bn for operating profits of £818m.

“Historically, other retailers have tended to move prices first and by more than Primark given Primark’s focus on low ASPs (meaning more margin pressure for Primark than peers in times of higher cost inflation),” the analyst said in a research note sent to clients.

“Guidance on Primark margins next year should remove some of the uncertainty currently reflected in valuation.”

Tuesday 09 November

INTERIMS

Renewi , Warehouse Reit

QUARTERLY EX-DIVIDEND DATE

INTERNATIONAL BUSINESS MACHINES CORPORATION COM STK USD0.20 (CDI)

INTERNATIONAL ECONOMIC ANNOUNCEMENTS

Balance of Trade (GER) (07:00)

Current Account (GER) (07:00)

Producer Price Index (US) (13:30)

ZEW Survey (EU) – Economic Sentiment (10:00)

ZEW Survey (GER) – Current Situation (10:00)

ZEW Survey (GER) – Economic Sentiment (10:00)

FINALS

Associated British Foods

ANNUAL REPORT

Associated British Foods

EGMS

Zhejiang Expressway Co ‘H’ Shares

TRADING ANNOUNCEMENTS

Direct Line Insurance Group, Grafton Group Ut (CDI), Meggitt, Persimmon, Watches of Switzerland Group

UK ECONOMIC ANNOUNCEMENTS

BRC Shop Price Index (00:01)

FINAL DIVIDEND PAYMENT DATE

Barratt Developments, Manchester & London Investment Trust

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