The Week Ahead: Burberry, ASOS, Barratt Developments

TL;DR

Concerns about lower global economic growth due to the Delta variant and anticipation of Fed tapering have led to a shift towards haven assets, such as bonds.

Transcript

hello i'm richard hunter head of markets and welcome to our look ahead for the week commencing the 12th of july markets have struggled to make much progress this week there's been a slight revision in growth estimates and whether there actually could be lower growth on the horizon this is driven by a couple of things first of all the um populist ar... Read More

Key Insights

• 🖤 Concerns about the Delta variant and Fed tapering have contributed to a lack of market progress.
• 🙂 UK GDP growth in May fell slightly short of expectations, but the services sector showed positive signs.
• 🥵 Burberry's trading statement should provide updates on store closures, reduced tourism, and their brand heat strategy in China.
• 💯 ASOS's trading statement will indicate the impact of the topshop acquisition and economic prospects on their core audience.

Questions & Answers

Q: What factors are causing concerns about global economic recovery?

The continued growth of the Delta variant in certain areas and the anticipation of Fed tapering are causing concerns about lower economic growth and impacting market progress.

Q: How has the UK's GDP growth performed in May?

The UK's GDP grew by 0.8% in May, slightly missing expectations. However, the services sector saw a 25% increase, benefiting from easing restrictions, and there is potential for further growth with upcoming staycations and high savings.

Q: What should investors look out for in Burberry's trading statement?

Investors should pay attention to any updates on the impact of store closures and reduced tourism on Burberry's business. China's market performance and the success of their brand heat strategy are also important factors to consider.

Q: What factors will be significant in ASOS' trading statement?

ASOS recently acquired the topshop suite of brands, which could attract a new audience and increase sales. Investors should observe the performance of ASOS's 20-something core audience and any impact of economic prospects on their trading.

Q: What metrics will be crucial in Barrett Development's trading statement?

Barrett Development has benefited from factors like the stamp duty holiday and mortgage availability. Investors should look out for metrics such as net cash position, forward sales, build completions, and any restrictions in the supply chain.

Summary & Key Takeaways

• Global markets have been struggling with concerns about lower economic growth due to the spread of the Delta variant and the anticipation of Fed tapering.

• UK GDP growth in May was up 0.8%, slightly missing expectations, but the services sector saw a 25% increase in figures with the easing of restrictions and the potential boost from staycations and high savings.

• Next week, important trading statements are expected from fashion brands Burberry and ASOS, as well as house builder Barrett Development, all of which have unique factors to consider.