It’s a busy week on the corporate front with Apple, Facebook and Tesla earnings the highlights from the US, while the pound will be sensitive to the Bank of England rate decision.

Bank of England

 

All eyes are on the Monetary Policy Committee (MPC) decision on Thursday, which will be accompanied by fresh economic projections and a press conference with Bank of England governor Mark Carney.

Market indicators suggest a roughly 90% chance the Bank will announce a quarter-point hike to interest rates for the first time in a decade. Third quarter GDP figures beat expectations while inflation has risen to 3%.

There remains a high degree of jeopardy, however, with several MPC members publicly questioning the logic of hiking rates at such an uncertain moment for the UK economy with Brexit on the horizon.

In contrast to counterparts at the ECB and Fed, which have carefully marshalled expectations well in advance, the Bank has shied away from effectively pre-announcing a hike. If the Bank fails to hike next week sterling will get whacked until there is any progress on Brexit.

Apple earnings

 

Apple (AAPL) is due to report its fiscal fourth quarter earnings after the close on Thursday. There is the usual sweep of metrics to pay attention to but iPhone sales has to be the main focus given they account for the largest share of revenues and there have signs of a muted response to the iPhone 8 so far.

EPS - For Q3 the company posted quarterly revenue of $45.4bn and EPS of $1.67, up from $1.42 in the year-ago quarter. For Q4, EPS is expected to rise to around $1.87.

Revenues - Apple guided revenues in a range of $49bn-$52bn, which at the mid-point of the range is a 7.7% increase from the year-ago period. Q3 was up 7%. Some concerns about the delay of the iPhone X but management probably knew they would not have it in time for Q4. Of more concern is the rough start to iPhone 8 sales which may be a problem in terms of achieving this guidance.

US carriers have indicated lacklustre sales thus far. AT&T reported 3.9% regular monthly customers upgraded in Q3, versus 5.1% when the iPhone 7 was launched last year. This meant 2 million fewer smartphones sold in the quarter by the carrier.

Services - Investors will be looking for another rise in Services revenues, which have continued to grow at a considerable clip to become Apple’s second-largest source of incomes.

Guidance – With the iPhone X due to launch Nov 3rd, there will be a lot of emphasis placed on the fiscal Q1 guidance in terms of sales and revenues. We’ll also be looking at gross profit margin guidance as sign of how Apple thinks the X will boost profitability. Q1 of fiscal 2017 was 38.5%.

Tesla

 

After three quarterly losses, Tesla (TSLA) is expected to make it four in a row when it reports Q3 earnings after the market closes on Wednesday. EPS is expected to be negative at around -$2.20.

Despite the losses the market has been receptive and TSLA has rallied 60% in the last 12 months, or about three times as much as the rest of the market. So earnings are considered to be less important than what indication there is on demand for the Model 3.

Also due to report after market close on Wednesday is Facebook (FB). The consensus EPS forecast is a little shy of $1.29, versus $0.88 a year ago.

Ryanair

 

After all the chaos, a time to take stock of the damage, if any, done to Ryanair (RYA) by flight cancellations comes on Tuesday with the 2018 first-half earnings update. It might be too early to see if any reputational damage is lasting, but there could be clues about to what extent the cancellations have affected earnings and the outlook for the rest of the year.

NFP

 

The monthly nonfarm payrolls report on the US labour market is due Friday at 12:30 (GMT) – the usual timings are out by an hour because North America’s daylight savings time shift occurs a week after Europe and the UK.

Last month the dollar bulls came rushing back to the party thanks to stronger wage data. Average earnings rose by 2.9% from 2.7% the previous month, offsetting concerns about the 33k fall in nonfarm employment.

Since then we have seen Treasury yields climb along with the dollar as markets begin to take the Fed’s commitment to further rate hikes more seriously.

Economic Calendar

(All times GMT)

Sunday, 29 October

Daylight savings time shift in Europe. Note US/Canada shift occurs Nov 5th.

Monday, 30 October

Tentative – German retail sales

08:00 – Swiss KOF economic barometer

08:00 – Spanish flash CPI, flash GDP

12:30 – US core PCE price index, personal spending

13:00 – Germany preliminary CPI inflation

23:50 – Japan preliminary industrial production

Tuesday, 31 October

00:00 – New Zealand ANZ business confidence

00:01 – UK GfK consumer confidence

01:00 – China manufacturing & non-manufacturing PMIs

03:50 – Japan monetary policy statement, BoJ outlook report, policy rate

05:00 – Japan BoJ core CPI

06:30 – BoJ press conference

07:45 – French consumer spending, preliminary CPI inflation

09:00 – Italy monthly unemployment

10:00 – Eurozone CPI flash estimate, EU economic forecasts, preliminary flash GDP

12:30 – Canada GDP, raw materials price index

13:45 – Chicago PMI

14:00 – US CB consumer confidence

21:45 – New Zealand employment change, unemployment rate

Wednesday, 1 November

00:01 – UK BRC shop price index

01:45 – China Caixin manufacturing PMI

09:30 – UK manufacturing PMI

12:15 – US ADP nonfarm employment change

14:00 – US ISM manufacturing PMI

14:30 – US weekly crude oil inventories

18:00 – FOMC statement, federal funds rate

Thursday, 2 November

00:30 – Australia trade balance, building approvals

08:00 – Spanish unemployment change

08:15 – Spanish manufacturing PMI

09:30 – UK construction PMI

12:00 – Bank of England official bank rate, monetary policy summary, inflation report

12:30 – BoE governor Mark Carney speaks

12:30 – US weekly unemployment claims, preliminary nonfarm productivity

Friday, 3 November

00:30 – Australia retail sales

01:45 – China Caixin services PMI

09:30 – UK services PMI

12:30 – Canada employment change, trade balance

12:30 – US nonfarm payrolls, average earnings

14:00 – US ISM non-manufacturing PMI, factory orders

Corporate Calendar

 

Monday, 30 October

HSBC Holdings (HSBA) – Q3 earnings

Tuesday, 31 October

Pfizer (PFE) – Q3/2017, EPS estimate 0.646

Under Armour (UAA) – Q3/2017, EPS estimate 0.187

BP (BP) – Q3 results

Ryanair (RYA) – H1 2018 earnings

WPP (WPP) – Q3 trading update

Just Eat (JE.) – Q3 order update

Wednesday, 1 November

Facebook (FB) – Q3/2017, EPS estimate 1.283

GoPro (GPRO) – Q3/2017, EPS estimate 0.015

Kraft Heinz Foods (HNZ) – Q3/2017

Office Depot (ODP) – Q3/2017, EPS 0.141

Tesla (TSLA) – Q3/2017, EPS estimate -2.213

Smurfit Kappa (SKG) – Q3 trading update

Next (NXT) – Q3 trading update

Paddy Power Betfair (PPB) – Q3 interim management statement

Thursday, 2 November

Apple (AAPL) – Q4/2017, EPS estimate 1.872

Starbucks (SBUX) – Q4/2017, EPS estimate 0.546

BT Group (BT) – Q2/interim results

Royal Dutch Shell (RDSA/B) – Q3 trading update

Tate & Lyle (TATE) – interim results

RSA Insurance Group (RSA) – Q3 trading update

Friday, 3 November

Smith & Nephew (SN.) – Q3 trading update

Source: Bloomberg

 

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