The Week Ahead: M&S, Burberry, AB Foods

TL;DR

The Fed confirms tapering while the Bank of England maintains interest rates, earnings season results exceed expectations, and upcoming reports from Associated British Food, Marks and Spencer, and Burberry are highly anticipated.

Transcript

hello i'm richard hunter head of markets and welcome to our look ahead for the week commencing the 8th of november there have been a couple of very important announcements this week first of all we had the confirmation that the fed would be tapering its asset buying program it's going to start to scale down by some 15 billion dollars per month whic... Read More

Key Insights

• ☠️ The Fed's decision to taper provides clarity for the market and assures investors that interest rate hikes may not be immediate.
• ☠️ The Bank of England's decision to maintain interest rates goes against market expectations, raising the possibility of future rate hikes.
• 😮 Earnings season continues to impress, with companies exceeding expectations, leading to new record highs in US indices.
• ⏮️ Associated British Food's Primark division's recovery will be a significant focus, given its previous struggles during the pandemic.
• 😋 Marks and Spencer's food business, along with its online sales and clothing/home divisions' performance, will be of high interest to investors.
• 👶 Burberry's digital brand strength and expansion in the US are attracting new customers and compensating for the decline in Asian tourism.
• 🤩 Strong full-price sales and global economic recovery progress will be key indicators of Burberry's performance.

Questions & Answers

Q: What is the impact of the Fed's decision to taper its asset buying program?

The tapering announcement was well-received by the markets, as it had been anticipated. Tapering does not necessarily imply an immediate interest rate increase, providing a favorable outlook for investors.

Q: Will the Bank of England raise interest rates in the near future?

While the Bank of England decided to keep interest rates unchanged, there is still a possibility of a rate hike in the coming months. The decision to maintain rates was against market expectations, creating some uncertainty.

Q: Which companies' earnings reports are highly anticipated in the next week?

Associated British Food's full-year numbers are eagerly anticipated, with a particular focus on the recovery of its Primark division. Marks and Spencer's half-year numbers, especially its food business, and Burberry's full-price sales and global economic recovery progress will also be closely watched.

Q: How is the ongoing earnings season performing in general?

The ongoing earnings season has been strong, with companies consistently surpassing expectations. This has propelled major US indices to new record highs and provided an upward trajectory for various sectors.

Summary & Key Takeaways

• The Fed announces the tapering of its asset buying program, with a gradual reduction of $15 billion per month, easing market concerns.

• The Bank of England decides to keep interest rates unchanged, going against market expectations, but a future rate hike remains plausible.

• Earnings season continues to impress, with companies exceeding expectations, driving major US indices to record highs.