The Week Ahead: Royal Mail, Tesco, Auto Trader

TL;DR

Despite the delicate balance of COVID-19 developments, markets have performed well, with the Bank of England injecting more stimulus, positive US retail sales, and hopes for infrastructure spending. Royal Mail, Auto Trader, and Tesco will provide important updates.

Transcript

hello i'm richard hunter head of markets and welcome to our look ahead for the week commence in the 22nd of june but another interesting week on the coronavirus front on the one hand of course we've had this breakthrough on the steroid basis in the uk with also some promising signs coming along in terms of a vaccine on the other hand we've seen ano... Read More

Key Insights

• ❎ COVID-19 developments, both positive (steroid treatment, vaccines) and negative (outbreaks in China, US), continue to heavily influence the markets.
• 💹 The Bank of England's injection of £100 billion in quantitative easing has supported market performance.
• 💪 Strong US retail sales and positive non-farm payrolls have contributed to market optimism.
• 🤞 Hopes for substantial infrastructure spending by the US government have boosted market sentiment.
• 😀 Royal Mail faces challenges in adapting to the changing postal landscape, with declining letters and increasing parcels.
• 💍 Auto Trader has experienced a significant share price increase and may engage in mergers and acquisitions.

Questions & Answers

Q: How has the coronavirus situation affected the markets?

The markets have responded positively to developments such as breakthroughs in steroid treatment and vaccine progress, as well as stimulus measures implemented by central banks.

Q: What is the current state of the Dow Jones and the S&P 500?

Year-to-date, the Dow Jones is down nearly 9% and the S&P 500 is down around 4%.

Q: What can we expect from the Royal Mail's full-year numbers?

Royal Mail has faced challenges with declining letters but increasing parcel deliveries. The company has seen share price declines, union problems, and concerns about its transformation plan. The full-year numbers will provide insight into its performance.

Q: How has Auto Trader fared during the pandemic?

Auto Trader has experienced a significant increase in share price since its March lows, and its full-year results will show how the closure of car showrooms has impacted the company. M&A activities are also possible after a successful fundraising round.

Q: How has Tesco managed during the coronavirus outbreak?

Tesco saw an increase in sales but also faced rising costs due to the pandemic, including additional staff and operational changes. The company maintained its dividend, but its first quarter update will reveal its current trading situation.

Summary & Key Takeaways

• COVID-19 continues to have a significant impact, with positive developments in the UK regarding steroid treatment and vaccine progress, but an outbreak in Beijing and the US.

• The Bank of England has injected £100 billion in quantitative easing, totaling £300 billion since March, positively impacting the markets.

• US retail sales have been strong, non-farm payrolls were positive, and hopes are high for an additional $1 trillion infrastructure spending from the US government.