The Week Ahead: AB Foods, Dixons Carphone, AO World

TL;DR

The Federal Reserve's assurance and the announcement of a $1.2 trillion infrastructure spending plan have calmed inflationary concerns and led to record highs in the Nasdaq and S&P 500, affecting the oil price positively.

Transcript

hello i'm richard hunter head of markets and welcome to a look ahead for the week commencing the 28th of june after some inflationary concerns earlier in the week there were some fairly soothing noises from the federal reserve and this was backed up towards the end of the week by the announcement of a 1.2 trillion dollar infrastructure spending pla... Read More

Key Insights

• 😄 Inflation concerns eased through the Federal Reserve's reassurance and the announcement of a $1.2 trillion infrastructure spending plan, boosting the US economy.
• ✋ Record highs in the Nasdaq and S&P 500 resulted from the positive impact of these measures.
• 🥺 The UK's Bank of England recognizes stronger-than-expected GDP growth and inflation but considers them temporary, leading to unchanged interest rates and bond buying schemes.
• 👨‍💼 Dickson's Carphone has shown positive performance in its electricals business and online sales, but challenges remain in its mobile business.
• 🥺 AO World benefited from the shift to online during the pandemic, particularly in the purchase of white goods, leading to significant revenue growth.
• 👀 Three companies to watch next week are Associated British Food, Dickson's Carphone, and AO World, each with unique factors impacting their businesses.
• 🌱 The infrastructure spending plan in the US may result in increased energy demand, potentially benefiting the oil price.

Questions & Answers

Q: How did the Federal Reserve's assurances and infrastructure spending plan impact the US economy?

The Federal Reserve's reassurance and the announcement of a $1.2 trillion infrastructure spending plan have calmed inflationary concerns and boosted the US economy. This led to record highs in the Nasdaq and S&P 500, with potential energy demand increase due to the infrastructure plan.

Q: What is the current performance of the UK economy, as recognized by the Bank of England?

The Bank of England acknowledges stronger-than-expected GDP growth and inflation in the UK. However, like the Federal Reserve, they believe these trends are temporary, leading them to keep interest rates and bond buying schemes unchanged.

Q: What companies are reporting their trading results next week?

Three companies reporting next week include Associated British Food, with a focus on Primark's performance after lockdown easings and its expansion into the US. Dickson's Carphone will share its full-year numbers, particularly regarding its electricals business and challenges in the mobile business. AO World will present its full-year numbers, highlighting revenue growth in both the UK and Germany during the pandemic.

Q: How has the move to online affected AO World's revenue growth?

The move to online during the pandemic has benefited AO World, especially in the purchase of white goods. With a 72% increase in share price over the last year, the focus now shifts to whether they have been able to maintain their strong revenue growth in both the UK and Germany.

Summary & Key Takeaways

• Inflationary concerns eased as the Federal Reserve provided reassurance and announced a $1.2 trillion infrastructure spending plan, positively impacting the US economy.

• This led to record closing highs in the Nasdaq and S&P 500, also boosting the oil price, which has increased by 46% year-to-date.

• The Bank of England recognizes stronger-than-expected GDP growth and inflation in the UK but agrees with the temporary nature of these trends, hence keeping interest rates and bond buying schemes unchanged.