Friday preview: G7 kicks off, China trade data, Fuller's serves up results
A quiet day for UK company news will see traders look east early on Friday as China's trade data emerges overnight amid an improvement in trade relations with the US.
With no FTSE 350 constituents scheduled to report results, London Pride brewer and pubco Fuller Smith & Turner may be the largest company serving up numbers.
Fuller's, whose shares have lost around 12% since this time last year, last reported numbers in January, when like-for-like sales were said to have grown 3.4% for the preceding 42 weeks, consistent with the growth from the first half.
In the drink-led tenanted estate, LFLs rose 2%, the same as at the 33 week stage and only slightly slower than in the first half.
Due to the Beast from the East wider market was difficult in March, analysts at Numis noted, with the CGA Peach Tracker down 3.1% but Fuller’s metropolitan exposure means they do not expect a huge impact from the snow. EPS of 62.1p is forecast versus 61.4p a year ago.
The tenanted market is benefiting from robust growth in craft beer/spirits and a recent review of the estate, Numis said, expecting for the year as a whole managed LFL sales growth of 3.5% to translate into flat profits given ongoing cost headwinds.
"As in H1, we expect more subdued trading from the brewing business (H1 EBIT -13%) due to investment in marketing and site repairs. However, these costs are one-off in nature, creating scope for recovery in FY19."
Looking at macroeconomic news, China's trade data on Friday comes on the back of a slowdown in exports in March and signs of a pick-up in April as both imports and export growth jumped.
These trade developments are likely to dominate commodity investor sentiment, said Capital Economics. "The US negotiations with China are set to continue over the weekend but the EU, Canada and Mexico have already declared that they will retaliate."
The Chinese May trade balance is expected to growth to $31.9-32.5, depending on consensus forecast provider, from $28.4bn a month before. Year-on-year growth in exports is seen easing to 10.0-11% from 12.9% and import growth slowing to 18.7% from 21.5%.
Barclays, said that, reflecting the upside surprise in recent PMI trade-related indices, "we expect trade data to remain resilient in May, with growth in exports and imports likely to come in at 12%, and 20%, respectively".
The G7 meetings kick off on Friday, but, said Neil Wilson at Markets.com, "the market is not expecting much - equally the trade picture is not likely to deteriorate as the leaders get together. Risks seem on the upside as expectations for the US to relent on tariffs are already on the floor."
Closer to home, the Bank of England will publish its households' inflation expectations.
Pantheon Macroeconomics said it felt there was unlikely to have been much of a shift since the first quarter. "Of greater interest will be whether the net balance that expects interest rates to rise over the next 12 months has fallen from +56 in Q1.
"A sharp fall would indicate that the MPC's message that the public should prepare for gradual rate increases got lost when it decided to keep interest rates on hold in May."
Friday June 08
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Balance of Trade (GER) (07:00)
Current Account (GER) (07:00)
Wholesales Inventories (US) (15:00)
FINALS
First Property Group, Volex
TRADING ANNOUNCEMENTS
Fuller Smith & Turner
SPECIAL DIVIDEND PAYMENT DATE
Derwent London
SPECIAL EX-DIVIDEND DATE
Randall & Quilter Investment Holdings (DI)
AGMS
AA, Honeycomb Investment Trust, Novolipetsk Steel GDS (Reg S), P2P Global Investments, Proton Power Systems, Public Joint Stock Company Severstal GDR (Reg S), Standard Life Investments Property Income Trust Ltd., Telefonica SA, Time Out Group
FINAL DIVIDEND PAYMENT DATE
Barr (A.G.), Card Factory, Derwent London, Ibstock , Integrated Diagnostics Holdings, Irish Continental Group Units, Ocean Wilsons Holdings Ltd., Reach, SDL, SThree FINAL EX-DIVIDEND DATE Scottish Mortgage Inv Trust
INTERIM DIVIDEND PAYMENT DATE
Civitas Social Housing C Shs, McCarthy & Stone, Seplat Petroleum Development Company (DI)
QUARTERLY PAYMENT DATE
Civitas Social Housing