Earnings season continues on the FTSE with some of the heaviest hitters due to report, including the likes of HSBC and British American Tobacco. In Europe monthly PMI is to be closely watched, while in the US it’s the turn of the big retailers to report financials.

 

FTSE earnings

 

On the FTSE this week the focus is very much on financials and bank stocks in particular. HSBC, Barclays, Standard Chartered and Lloyds are all set to report their 2016 results but it is embattled Royal Bank of Scotland that is likely to be the most interesting for traders.

Losses for 2016 are forecast by analysts to be in excess of £2bn, its ninth straight year in the red. Is RBS a basket case?

Deutsche Bank certainly thinks not, recently upgrading its view from ‘sell’ to ‘hold’.

Fines weigh, however. RBS recently set aside £3.1bn to cover the expected fine for mis-selling residential mortgage backed securities in the US. However the likely fine is expected to be more and the bank warned that ‘further substantial additional provisions and costs may be recognised and, depending on the final outcome, other adverse consequences may occur’.  The sale of Williams & Glyn branches is another costly sticking point.

Investors also seem to think the worst is over. The stock is now up about 50% from its low of last summer, but it is significantly underperforming the rest of British banking sector. FTSE banks are up 44% over the last year while RBS is trading a touch lower than where it was a year ago.

Meanwhile, British American Tobacco is due to report earnings.

Nordstrom

 

Nordstrom, the retail chain that recently incurred the wrath of President Trump after it dropped his daughter’s clothing line, is among the most interesting US companies reporting this week. The Republican President said his daughter had been treated “so unfairly”, while advisor Kellyanne Conway told Fox News viewers to buy the merchandise.

The decision to ditch Ivanka Trump’s brand was prompted by sliding sales, not politics, Nordstrom said. We should find out in the results whether this was true or a case of ‘alternative facts’. Expect Mr Trump to fire off a tetchy tweet or two in the direction of Nordstrom on results day whatever the numbers are like.

Retail season continues with Macy’s, JC Penney, Home Depot and Gap among the other companies reporting this week.

FOMC minutes

 

Following Janet Yellen’s testimony before Congress, the next big piece of data from the Federal Reserve comes in the shape of the minutes from the most recent Federal  Open Market Committee (FOMC) meeting. The minutes should offer a lot more clues about whether the Fed expects to still hike three times this year. Markets have cooled a little, indicating just the two 25-basis-point increases in 2017.

Eurozone flash PMIs

 

In Europe, attention is on the monthly flash PMIs for the manufacturing and services sectors. Growth and inflation is picking up, although there was a slight downward revision to growth in the fourth quarter of last year to 0.4%. Better news came from Italy, where the 0.9% expansion last year was the best since 2010.

The PMI figures will be monitored closely for signs of further improvement. Continue upward pressure on growth could force the European Central Bank (ECB) to consider tapering bond purchases which might spur demand for the euro.

 

Economic Calendar

(All times GMT)

Monday 20 February

All day – Presidents’ Day bank holiday (see amended trading hours)

00:01 – UK Rightmove house price index

15:00 – Eurozone consumer confidence

Tuesday 21 February

00:30 – RBA monetary policy meeting minutes

00:30 – Japan flash manufacturing PMI

04:30 – Japan all industries activity

08:00 – French flash manufacturing and services PMIs

08:30 – German flash manufacturing and services PMIs

09:00 – Eurozone flash manufacturing and services PMIs

10:00 – UK inflation report hearings

14:25 – US flash manufacturing and services PMIs

Wednesday 22 February

09:00 – German Ifo business climate

09:30 – UK second estimate GDP, Q4 2016

10:00 – Eurozone final CPI

13:30 – Canada retail sales

15:30 – US crude oil inventories

19:00 – FOMC meeting minutes

Thursday 23 February

00:30 – Australia private capital expenditure

13:30 – US weekly unemployment claims

Friday 24 February

13:30 – Canada CPI inflation

15:00 – US new home sales, revised UoM consumer sentiment

Earnings Calendar

 

Monday 20 February

Bovis Homes Group (BVS) – Y/2016, EPS estimate 1.013

Hammerson (HMSO) – Y/2016, EPS estimate 0.290

Tuesday 21 February

Home Depot (HD) – Q4/2017, EPS estimate 1.330

Macy’s (M) – Q4/2017, EPS estimate 1.952

Anglo American (AAL) – Y/2016, EPS estimate 1.405

HSBC Holdings (HSBA) – Y/2016, EPS estimate 0.624

InterContinental Hotels Group (IHG) – Y/2016, EPS estimate 1.937

Wednesday 22 February

HP (HPQ) – Q1/2017, EPS estimate 0.369

Barratt Developments (BDEV) – S1/2017

Lloyds Banking Group (LLOY) – Y/2016, EPS estimate 0.072

Weir Group (WEIR) – Y/2016, EPS estimate 0.634

Thursday 23 February

Gap (GPS) – Q4/2017, EPS estimate 0.499

Hewlett Packard Enterprise Co (HPE) – Q1/2017, EPS estimate 0.442

Kohl’s Corp (KSS) – Q4/2017, EPS estimate 1.343

Nordstrom (JWN) – Q4/2017, EPS estimate 1.159

BAE Systems (BA/) Y/2016, EPS estimate 0.402

Barclays (BARC) – Y/2016, EPS estimate 0.138

British American Tobacco (BATS) – Y/2016, EPS estimate 2.463

Centrica (CNA) – Y/2016, EPS estimate 0.161

EasyJet (EZJ) – Ex-dividend date

Rio Tinto (RIO) – Ex-dividend date

Friday 24 February

JC Penney Co (JCP) – Q4/2017, EPS estimate 0.616

International Consolidated Airlines Group (IAG) – Y/2016, EPS estimate 0.831

Pearson (PSON) – Y/2016, EPS estimate 0.563

Rightmove (RMV) – Y/2016, EPS estimate 1.375

Royal Bank of Scotland (RBS) – Y/2017, EPS estimate 0.117

Standard Chartered (STAN) – Y/2016, EPS estimate 0.184

William Hill (WMH) – Y/2016, EPS estimate 0.213

Source: Bloomberg

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