The Week Ahead: BP, Shell, Next and US results

TL;DR

Despite some disappointing company reports, the US markets ended the week on a strong note. Next week, key highlights include Q1 updates from BP, Shell, and Next.

Transcript

hello i'm richard hunter head of markets and welcome to our look ahead for the week commencing the 2nd of may it's been a fairly strong end to the week all things considered company reports have very much been front and center there have of course been a couple of horror shows in the reporting season so far from the likes of netflix while amazon an... Read More

Key Insights

• 🧑‍💻 Company reports have been a mix of positive and negative outcomes, with certain tech giants disappointing while others perform well.
• ☠️ Concerns over interest rates and inflation continue to impact market gains.
• 😮 BP and Shell are likely to report good Q1 results due to the rise in oil prices, but impaired shareholder returns may be a concern.
• 😀 Next, despite positive factors, faces challenges from weak retail sales and a squeezed consumer.

Questions & Answers

Q: Which companies had disappointing reports in the recent reporting season?

Netflix, Amazon, and Apple had disappointing reports, while Microsoft and Meta Platforms (formerly Facebook) performed well.

Q: What has limited the gains in the US markets?

Concerns over interest rates and the inflationary environment have limited gains in the US markets.

Q: What are the year-to-date performance figures for major market indices?

The Dow Jones is down 6.71%, the S&P 500 is down 10%, and the Nasdaq is down 17.7% year-to-date.

Q: What are the key highlights for next week?

The major highlights for next week are Q1 updates from BP, Shell, and Next.

Q: Why are BP and Shell expected to have good results?

The rise in oil prices, which have increased by 40% in the year-to-date, should contribute to positive Q1 results for BP and Shell.

Q: What potential impacts might BP and Shell face in their upcoming reports?

BP and Shell may need to take multi-billion dollar impairments as a result of their exits from Russia, potentially impacting shareholder returns, including dividends.

Q: Why has Next's share price gone down despite positive factors?

Next's share price has declined despite five profit upgrades and sales returning to pre-pandemic levels due to weak UK retail sales and an increasingly squeezed consumer.

Q: What will be of particular interest in Next's first quarter update?

Next's outlook comments, which tend to be fairly cautionary, will receive particular attention in their first quarter update.

Summary & Key Takeaways

• Company reports have been a mixed bag, with strong showings from Microsoft and Meta Platforms, but disappointments from Netflix, Amazon, and Apple.

• US markets have been limited by concerns over interest rates and inflation, with the Dow Jones down 6.71%, S&P 500 down 10%, and Nasdaq down 17.7% year-to-date.

• BP and Shell are expected to report fairly positive Q1 results due to the rise in oil prices, but potential impairments from their exits in Russia may impact shareholder returns. Next, despite strong sales, faces challenges from weak UK retail sales and a squeezed consumer.