The Week Ahead: BoE meeting, retailers’ results, Taylor Wimpey update

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The second week of 2017 will see a number of retailers publishing their trading results and updates including Tesco, M&S, Morrisons and Sainsbury. The Bank of England is also meeting on Thursday to discuss any moves on monetary policy.

Fund Strategy looks at some key events shaping the week and what to expect.

Monday 9 January

  • House of Commons agenda – Work and Pensions Questions
  • EU unemployment, November – Eurostat

Tuesday 10 January

  • WM Morrison (December trading statement)

Graham Spooner, investment research analyst at The Share Centre says: “The all-important Christmas trading update will be eagerly anticipated by followers of the sector.

“The company had a good 2016 with rising sales growth, and investors will be hoping that the momentum continued over the run up to Christmas and the new year.”

Wednesday 11 January

  • European Central Bank non-monetary policy meeting
  • Saga (Q3 results)

Spooner says: “Management are keen to move the company away from its main insurance and holiday services to other areas, such as taking commission from third parties who will use the brand name and new services such as SagaMoney.

“There is potential for the group to continue to benefit from the increasingly important over 50’s market and its brand name. Investors will be expecting to hear that the group remains on track to meet its full year targets.”

  • Taylor Wimpey (Q4 trading update)

Spooner says: “The house builders have generally provided good numbers despite the uncertainty that was supposed to have been created from the Brexit vote. Investors will expect higher completions, higher average house prices and greater distributions back through dividends.

“But key for the sentiment in the sector going forward will be investor confidence which will be reflected in the size of the order book and management’s plans on land bank and plot acquisitions. The general view here has been that housebuilders will take a more cautious approach on acquisitions for development.”

  • J Sainsbury (Q3 trading update)

With like-for-like sales under pressure recently, Spooner says investors should hope the company will maintain its market share.

He says: “Investors will be keen to see early signs of the effect of the Home Retail purchase and trialling of Argos outlets in Sainsbury’s stores, which has the potential to increase its exposure to non-food markets.

“The share price has struggled to make any headway over the last two years as a result of growing competition.”

Thursday 12 January

  • UK Monetary Policy Committee Meeting – interest rate decision and minutes
  • Marks & Spencer (Q3 trading update)

Spooner says: “The hard times for the sector continue as reflected in Next’s very disappointing trading update published on Wednesday which dragged shares of peers and competitors such as M&S down with them.

“Investors may expect the general merchandise division to continue to struggle, and management could cite the tougher trading environment, such as rising garment costs due to sterling’s fall and rising inflation. However, food and online sales should continue the trend of recent years. Management’s outlook for 2017 and Brexit uncertainties will be worth noting.”

Friday 13 January

  • Tesco (Interim management statement)
  • US Manufacturing and Trade