Wednesday preview: BoJ, GlaxoSmithKline and Next in the spotlight
By Alexander Bueso
Date: Tuesday 30 Oct 2018
(Sharecast News) - Barring surprises, the focus on Wednesday will likely be on the Bank of Japan's monetary policy meeting, with traders scanning the headlines for any whiff of any potential near-term shifts in its policy settings.
That is especially pertinent for global financial markets given the ongoing grind higher in US interest rates and the looming end of the European Central Bank's bond purchase programme, come December.
The consensus is for the BoJ to stay put, but for analysts at Bank of America-Merrill Lynch there was some risk of an "early adjustment" due to financial stability concerns.
Thus, their recommendation to investors was simple: " watch the language on this topic in the Outlook Report."
"While financial stability concerns may become a bigger topic down the road, the majority of the board places a greater weight on the price stability mandate at the moment," economists at BofA-ML said.
"We think the BoJ leadership will continue advocating the use of macro-prudential tools, not rate adjustments, to address emerging financial stability concerns while also stressing the need for structural reforms in the banking sector."
Stateside meanwhile, in the run-up to Friday's monthly US non-farm payrolls report, the spotlight will be on consultancy ADP's private sector jobs report for October at 1215 GMT.
Across the Channel, a barrage of usually outdated readings on the likes of Spanish and Austrian third quarter GDP or euro area unemployment in September will garner more attention this time around in the wake of Tuesday's unexpectedly weak preliminary reading on third quarter GDP at the Eurozone level.
GlaxoSmithKline is among the companies set to update markets on Wednesday.
UBS is forecasting the pharmaceuticals maker will announce third quarter sales of £8.03bn, for core operating profits of £2.40bn and core earnings per share of 33.0p.
In particular, the Swiss broker said it would be watching to see how its new products were supporting the company's long-term growth forecasts, especially Trelegy and Shingrix, which it said together accounted for roughly 60% of the top line growth it forecast for the company over 2017-2022.
Analyst Michael Leuchten expected sales from Trelegy to printat £56m and those for Tivicay to come in at £695m.
Fashion retailer Next was also scheduled to update markets with UBS having penciled-in full-price sales growth of 2% for the third quarter, partly on the back of positive seasonal factors relative to the last quarter of the year.
Nevertheless, warmer weather may have impacted on the company's sales of outerwear, the broker said.
In terms of the main 'talking points' to watch out for in the company's trading statement, analyst Andrew Hughes pointed to: "the runway for growth from The Label and International, the potential benefit from industry capacity reduction, and the ongoing impact from channel shift (both stores to online, and Next branded ranges to Label)."
Wednesday October 31
INTERIM DIVIDEND PAYMENT DATE
888 Holdings, Essentra, NAHL Group, Smith & Nephew, STV Group, Wynnstay Group
QUARTERLY PAYMENT DATE
F&C Commercial Property Trust Ltd., F&C Private Equity Trust, Funding Circle SME Income Fund, Middlefield Canadian Income PCC, Schroder Income Growth Fund
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Chicago PMI (US) (13:45)
Crude Oil Inventories (US) (14:45)
MBA Mortgage Applications (US) (11:00)
Retail Sales (GER) (06:00)
Unemployment Rate (EU) (10:00)
Q3
Gem Diamonds Ltd. (DI), GlaxoSmithKline, Next, Smurfit Kappa Group, Standard Chartered
EGMS
VietNam Holding Ltd
AGMS
AEW UK Long Lease Reit , Brooks Macdonald Group, Defenx, JPMorgan Global Growth & Income, Maxcyte (DI), Pantheon International , Rainbow Rare Earths Limited NPV, VietNam Holding Ltd
TRADING ANNOUNCEMENTS
Computacenter, Gem Diamonds Ltd. (DI), Just Group, Next, PPHE Hotel Group Ltd, River and Mercantile Group , Riverstone Energy Limited , Watkin Jones
UK ECONOMIC ANNOUNCEMENTS
GFK Consumer Confidence (00:01)
FINAL DIVIDEND PAYMENT DATE
Abbey, Alumasc Group, Beeks Financial Cloud Group, Pembroke Vct, Pembroke Vct B, Standard Life UK Smaller Companies Trust
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