Despite an incredibly busy company results schedule on Thursday, investors will be forgiven for being a touch distracted as they wait for the Bank of England's decision on its asset purchase programme (quantitative easing, or QE), due out at noon.
Though the suspicion is that there is a sizeable minority on the Bank of England's Monetary Policy Committee (MPC) in favour of more QE, the market believes it is, nevertheless, a minority. At least, that is the interpretation based on sterling's movement, as the pound normally takes a pounding when the market thinks more QE is on the way.
The MPC has already sanctioned £375bn of purchases of gilts since the credit crunch, and most economists agreed that were the MPC to top up the QE pot, this would be the month in which it would do so, after last announcing an increase in July. However, better than expected economic growth in the third quarter seems to have headed off the QE posse at the pass.
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On the results front, Panmure Gordon expects the downgrade cycle will continue at supermarket chain Morrisons, with the group seen under-performing the market all the way into fiscal 2014.
The broker is forecasting third quarter (Q3) like-for-like sales will have declined by 0.1%, which will put pressure on the profit & loss account.
"It has already announced Q1 and Q2 like-for-like sales declines of 1.0% and 0.9% (ex-petrol) respectively. Q3 has a slightly tougher comparable, but we look for a decline of 1%. New space is expected to add around 2.1% to sales growth in H1 [first half], so total sales growth should be just over 1% (ex-petrol). The last Kantar data for the 12 weeks to September 30 had Morrison growing at 0.0%, so the risk to our forecast seems to be on the downside," Panmure Gordon reckons.
Property web site Rightmove's update on Thursday will provide a good opportunity for investors to catch up on trading and operational developments since the group's interims on August 1st, notes Roddy Davidson at Westhouse Securities.
The update "will also provide a chance to gauge the company's recent experience of / expectations for the UK housing market, whether this accords with the weak and patchy environment suggested by recent surveys and whether government backed initiatives are stimulating activity. Finally, we will also look for feedback on whether the merger of Zoopla, Primelocation and FindaProperty (backed by DMGT and P.E. investors) has increased competitive tension," said Davidson, who reckons holders should bank profits ahead of the trading update.
3i Infrastructure, BTG, Cable & Wireless Communications, Charles Stanley Group, Dairy Crest Group, Electrocomponents, Experian, Flybe Group, Shanks Group, Tate & Lyle
INTERIM DIVIDEND PAYMENT DATE
British American Inv Trust, Petropavlovsk, Yule Catto & Co
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Balance of Trade (GER) (07:00)
Balance of Trade (US) (13:30)
Bloomberg Consumer Confidence (US) (14:45)
Continuing Claims (US) (13:30)
Current Account (GER) (07:00)
ECB Interest Rate (EU) (12:45)
Initial Jobless Claims (US) (13:30)
Retail Price Index (GER) (07:00)
Coca-Cola HBC S.A., Corio NV, Lancashire Holdings, Talvivaara Mining Company
Associated British Foods
Aviva, Balfour Beatty, Bumi, Eurasian Natural Resources Corp., Hammerson, Hardy Oil & Gas, Howden Joinery Group, Morrison (Wm) Supermarkets, Reed Elsevier, Rightmove, RSA Insurance Group, Schroders, Schroders (Non-Voting), Spirent Communications, Supergroup, Trinity Mirror, Wetherspoon (J.D.), Yule Catto & Co
Craneware, Genus, IndigoVision Group, Macau Property Opportunities Fund Ltd., New Star Investment Trust, Wetherspoon (J.D.)
UK ECONOMIC ANNOUNCEMENTS
Balance of Trade (09:30)
BoE Interest Rate Decision (12:00)
FINAL DIVIDEND PAYMENT DATE
Edge Performance VCT 'D' Shares, Edge Performance VCT 'E' Shares, Edge Performance VCT 'F' Shares, Edge Performance VCT G Shares, Penna Consulting
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