Week Ahead: Big Banks | Miners | Rolls Royce’s Turnround | EU Inflation Data

19th Feb by Keelan Cooper

25 comments 3778 reads

Good morning and welcome to the Week Ahead, your weekly destination for discussion and analysis of the largest stocks in the UK and overseas.

This week is anticipated to be comparatively quieter on the macroeconomic front, especially following last week's flurry of activity. The US inflation figures came in higher than expected, causing a 1.3% drop in both the S&P 500 and the FTSE 100, as investors scaled back their hopes that interest rate cuts would come quickly this year. On Wednesday, the UK announced its own CPI figures, which dropped to 4%. Although with food prices falling for the first time in more than two years, the domestic markets recovered some of their previous losses.

This week, the focus will be on the CBI industrial trends (orders) data. This report holds a crucial place in assessing the expectations of manufacturers and provides insights into prevailing business conditions.

Thursday will mark another important day on the economic calendar with the Eurozone CPI print and the release of US jobless claims. Given the market volatility witnessed following the US CPI and PPI prints last week, Thursday holds the promise of further turbulence. Investors will closely scrutinise both the Eurozone and US economic indicators, seeking cues for potential shifts in monetary policies and market trajectories. This data is likely to have an impact on the UK markets.

Rounding off the week on Friday is the German GDP data. This will help shed further light on Germany's economic performance, which has been struggling over the past year, and its broader implications for the Eurozone and global markets. The figures are expected to come in showing a -0.2% contraction year on year.

Companies reporting

Day	Big UK earnings	US company reporting	EU company reporting
Monday - 19th Feb	Moneysupermarket.com FY 2023 results BHP HY 2023 results (released in the evening UK time)
Tuesday - 20th Feb	InterContinental Hotels Group FY 2023 results Barclays FY 2023 results	Walmart Q4 2024 earnings Home Depot Q4 2023 earnings	Carrefour FY 2023 results Fresenius Medical Care FY 2023 results
Wednesday - 21st Feb	Rio Tinto FY 2023 results Glencore FY 2023 results HSBC FY 2023 results BAE Systems FY 2023 results Tate & Lyle Q3 2024 trading statement	Nvidia Q4…

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LumpedOn

19th Feb

Excellent new section to Stocko, and even better now it's including EU stocks too - fantastic for those who also subscribe to EU region to get a little more newsfeed and opinion. Great work.

Celatron 21

Excellent Week ahead addition. One gripe is that the above appears to show Glencore FY23 as publishing on this Tuesday but I thought it was going to be Wednesday as showing on The Glencore stock report.

martinck1

Echoing other subscribers' thoughts on this - really helpful, thanks for the addition.

I hold Lloyds Banking (LON:LLOY) and Rio Tinto (LON:RIO), so particularly interested in those companies.

Mark Carter

BA Eyes down for a full house. A year ago shares were at 917p with a mkt cap of £27.6b and estimated 2023 revenues of £21.9b. They reported a record order backlog of £58.9b, a little over 2X mkt cap.

It's highly likely that they will set a new record backlog.

Current 2023 estimates are revenues £24.7, net profits £1.89b. Let's see how close they turn out.

Pimlico on Thames

Not sure we need to see previous (2) weeks' in the box. Current week will do.

ajlo

This is great Keelan thanks, I'm generally behind the curve on companies reporting and hold several of those listed. Also have Booking Holdings on a watchlist, much appreciated,

Caper4

Another very pleased Stocko subscriber to see this focus on large caps . I think most of us will have a portfolio which includes both small , medium and large caps so why not extend your superb coverage of smaller caps to at least some larger ones ? I am a holder of BAE Systems (LON:BA.) HSBC Holdings (LON:HSBA) and Rolls-royce Holdings (LON:RRN) LON:RRN) so really value your brief review Keelan.

turbo

I am wondering if now might be a good time to invest in a UK banking fund or ETF. iShares Core FTSE 100 UCITS ETF GBP Dist (LON:ISF) seems to be one possibility. Any thoughts appreciated.

Keelan Cooper

Hi banterex,

Thank you for the kind words!

There's plenty more to come.

Best,
Keelan

Hi cafcash49,

Great to hear that you're enjoying the large cap coverage.

It was a good week for the FTSE in the end, as it recovered Tuesday's losses and some. The UK CPI figure did 'beat' expectations, which seems to have provided some relief for the US markets as well.

Will be interesting to see what the reaction is to the Eurozone inflation data on Thursday.

Best,
Keelan

Hi LumpedOn,

We're pleased that you're finding the inclusion of EU stocks useful!

These articles are still in their early days, so feedback like this will help guide us on the structure and what we include moving forward.

Best,
Keelan

Hi Celatron21,

Thank you for your comment.

I've double-checked the article, StockReport, and Glencore's official site, and all appear to agree on FY results being published this Wednesday.

https://www.glencore.com/inves...

Please do let me know if I've missed something!

Best,
Keelan

20th Feb

Barclays (LON:BARC) update this morning was very well received by the markets, with the shares ending the day 8.6% higher, marking its largest one-day rise since November 2020.

In its strategic 3-year plan, the company announced a further £2 billion of cost reductions, a streamlining of its business functions, and a path to return £10 billion to shareholders.

Will be interesting to see how the market reacts to HSBC Holdings (LON:HSBA), Lloyds Banking (LON:LLOY), and Standard Chartered (LON:STAN) announcements over the next 3 days, respectively.

Indie

21st Feb

BAE Systems (LON:BA.) have posted good final results (earnings up 14%) which makes me happy as a shareholder but sad as it comes from increased world instability and conflict.

Actuals came in at revenues of £23.1b, net profit £1.9b.

One thing that is confusing is that two sets are published. One is IFRS (which we might call "the real one"), and the one "as defined by group", which is higher (quelle surprise). The "made up" revenues were £25.3b. So whether you think revenues are higher or lower than analyst estimates depends on which revenues you think analysts are trying to predict. Presumably IFRS, in which case it's a little under.

Shares are down 2% in early trading.

BenHazz

NVIDIA (NSQ:NVDA) . Just wow. Talk about knocking it out of the park on earnings. Semiconductors and AI Sector aren't cooling down any time soon.

22nd Feb

Just finished watching the Prelims presentation on Lloyds Banking (LON:LLOY) (I hold). The management and in particular the CFO came across very well. I understood about 70% of it (up from 60% last year), but this is a business returning cash (dividends and share buybacks), while also indicating they are happy with a lower level of capital coverage (CET1) in the future, so more surplus cash.

Obviously a seemly certain future Labour govt is scary for UK banks' share price and also banks have a habit of being hit by buses, but the current price at 43p looks a strong positive around the future balance of risks ahead.

Anthony127

It is noticeable to me that the big four Banks seem to be trying to improve their margins at the expense of its customers which I think is very poor.

Banks are generally paying nothing or insignificant amounts of interest. Also they are rapidly closing branches and leaving many people isolated even in terms of obtaining cash, not to mention making many staff redundant.

It would be good to see a Bank that aligns its efficiency improvements with helping its customers. This would be the Nick Sleep philosophy of improving margins by improving customer experience. Perhaps some of the smaller Banks are trying to do this but I think the big four are missing a trick.

ken mitchell

23rd Feb

ken mitchellJoined 2016 729 postsYesterday 9:59 pm

(I posted most of this on a thread specifically for Mining Sector yesterday evening, to try and draw more attention to that thread, but it might be worth posting it here too. The sector might not have bottomed yet, and there are, as Anglo American reminded yesterday, continuing short term challenges, but note the end bit of that Anglo American sentence ……..”Demand trends for metals and minerals have rarely looked better.” VERY high chance of a big multi year Mining sector Bull Market ahead, and it’s almost certainly a question of “when” and not “if.”. Why is covered in the the header for the “Mining sector bull market in 2024” thread.

Here’s the rest of my post there:-

“There’s a good chance it’s near the bottom for Mining sector. Dividend cuts as expected and for these too this might well be their low point.

Sector even more volatile than usual at present and even just during the day. e.g Anglo American (LON:AAL) was up over £1 at one point today but ended the day up 52p at £18.30 after their results. Lowest so far was £16.70 last December. Peak was £41.20 in April 2022. As suggested before it’s best to buy Mining sector shares and Investment Trusts like BlackRock World Mining Trust (LON:BRWM) as near to their lows as possible, and on down days. That big over 50% Anglo American(LON:AAL) share price fall has priced in most of the negatives, and market reaction to Results was positive today.I hold.

Rio Tinto (LON:RIO) £52.56 surprised by increasing the final dividend from 185p to 203p when a cut was expected but there’s no additional special. Even so that’s a yield around 6%. The low was £45.60 in August last year. High was £65.35 in 2021. I hold.

BHP (LON:BHP) £23. Low was £20.52 in Oct 2022 and high £30 in April 2022. I sold after their Results. Main reason was potential huge payout for the terrible Mariana Brazil Mine Disaster It might well drag on for ages and is a big put off anyway. Also with this hanging over BHP there’s not enough upside potential to justify continuing to hold.

Glencore (LON:GLEN) £3.79. Down 6p more today. Now at the lowest price for ages. High was £5.76 in Jan last year. Bad news now priced in imo. The Teck Resources coal acquisition was pricey….but might well get demerged as a separate business within a couple of years and on the US market.

Glencore (LON:GLEN) is not paying any top up returns this time but their business is highly cash generative even at current depressed commodity prices, so there could well again be big top up returns ahead. At this price a bidder might be tempted too. I hold.

BlackRock World Mining Trust (LON:BRWM) £5.04. It bottomed at £4.95 yesterday. Peak was £7.92 in April 2022. They haven’t reported yet. Final dividend sure to be cut in line with the cuts from their main Mining share holdings. Final liklely to be around 13p to 15p for total around 30p to give 6% yield. Great way to play the sector for anyone not keen on trying to select the best Mining shares to go for. I’ve held for ages.

Key case for Mining sector in the template for this (Mining sector bull market in 2024) thread. China a drag…..for now. Strong case still for big Mining bull market ahead, with buys or part buys now likely to see big gains AND as in previous good runs for the sector, big dividend increases too.

StrawberryDreams

25th Feb

I agree.The large UK banks are being valued as 'cigar butts', old economy companies, even for the UK market.Wise (LON:WISE), although not a bank (yet), is worth keeping an eye on still in terms of both operations and market valuation.And i think Monzo is still eyeing an IPO.It'll be interesting to see ipo valuations and market interest post IPO.

Metro Bank with its large overseas major shareholder is trying to fill the gap, in terms of those who prefer the smooth digital experience solely having already left the big banks, and the big banks are closing down their physical premises and other servicies, whilst still raking in all the extra fees.And those who value all the 'extra services' that were included, including physical face to face service, in exchange for poor deposit rates, extra fees, are left 'holding the bag', and without a natural home.The post office is trying to fill some of the gap, but local post offices are closing at a fair rate too.

It'll be interesting to see if Metro has the brand power, as well as continued firepower, to succeed.Traditional banks still hugely benefit from customers' inertia of change.Perhaps they can compete with the newer, more agile fintechs in the future.All still to play for i guess..!

Week Ahead: Big Banks | Miners | Rolls Royce’s turnround | EU inflation data

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Keelan Cooper

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