The Week Ahead: Next, Smiths Group

TL;DR

Despite concerns about the Chinese property developer Evergrand and potential contagion in the property sector, investors were reassured by the Federal Reserve's meeting and the Bank of England's comments on interest rate rises. The tourism sector saw improvement, and the FTSE 250 performed well. Next and Smith's Group are companies to watch next week.

Transcript

hello i'm richard hunter head of markets and welcome to our look ahead for the week commencing the 27th of september it's been a fairly choppy week in markets although they did manage to regain some points as the week wore on obviously there had been concerns around the chinese property developer evergrand and a potential default although hopes are... Read More

Key Insights

• 😄 Concerns about Evergrand's potential default eased, bringing some stability to the market.
• ☠️ The Federal Reserve's commitment to gradual interest rate hikes provided reassurance to investors.
• 😮 The Bank of England indicated the possibility of upcoming interest rate rises due to elevated inflation levels.
• 🙈 The tourism sector saw positive growth after the easing of travel restrictions.
• 🫰 The FTSE 250 has been the top-performing UK index, showing a 16% increase in the year.
• 🪛 Next, a retailer, is expected to release positive half-year numbers, driven by growth in full price sales.
• 😷 Smith's Group will focus on its core industrial technology areas after selling its medical device business.

Questions & Answers

Q: What were the main concerns in the market this week?

The main concerns were centered around Evergrand, a Chinese property developer's potential default and the impact it could have on the global property sector.

Q: How did the Federal Reserve meeting affect investor sentiment?

The meeting provided reassurance as it indicated that tapering is likely to continue but interest rate hikes would be gradual, avoiding potential disruptions to economic growth.

Q: Did the Bank of England mention anything about interest rate rises?

Yes, the Bank of England suggested that interest rate rises may be necessary due to elevated inflation levels, but it is unlikely to happen until next year.

Q: Which sectors experienced positive developments this week?

The tourism sector saw improvements with the lifting of international travel restrictions, leading to a 21% increase in the share price of International Consolidated Airlines.

Summary & Key Takeaways

• Markets had a volatile week but rebounded slightly as concerns about Evergrand's potential default eased. The Federal Reserve meeting provided reassurance about tapering and interest rate rises. The Bank of England hinted at upcoming interest rate hikes.

• The tourism sector improved as international travel restrictions were lifted, leading to a 21% increase in shares of British Airways owner International Consolidated Airlines. The FTSE 250 continues to outperform other UK indices.

• Next, a retailer, is expected to release half-year numbers. Previous profit upgrades and strong sales have boosted their share price. Additionally, Smith's Group is expected to announce their four-year numbers, with a focus on their core industrial technology areas.