Hello and welcome to the working week.
The Chinese Communist party is preparing to do something it has only done three times in its existence when it meets on Monday for the sixth and penultimate plenum of its five-year term, and it has echoes of a dark period in the country’s past.
The only advertised item on the agenda for the four-day event is a resolution on the “important achievements and historical experiences of the party’s 100 years of struggle” — a measure only previously undertaken by Deng Xiaoping in 1981 and Mao Zedong in 1945. That first “historic resolution” condemned those with dissenting views to Mao, preparing the way for him to become sole leader.
This week’s vote will pass, clearing the way for current president, Xi Jinping, to secure an unprecedented third term at the Chinese Communist party’s 20th congress next year. China is now undergoing a new control revolution.
This is a week of anniversaries — most notably, the end of the first world war and the fall of the Berlin Wall. Both of these have a resonance for Germany, which is considering its future post Merkel.
It is a reminder for all of us, however, about why we need to be aware of where we have come from as well as looking forward to events.
Companies
Among the results this week are two British high-street brands. First, we have Marks and Spencer, which is midway through its latest, and by common consent, most far-reaching turnround effort. Profit upgrades at M&S have hardly been commonplace over the past three decades, so even an acknowledgment in August that full-year profits would be at the top end of forecasts was enough to trigger a rally in the shares. They have now doubled since the depths of the pandemic last year.
Investors will be looking for evidence this week that the changes it is putting in place are yielding durable results. Sector-wide concerns such as supply-chain cost pressures — this piece on that subject by Tim Harford is very good, by the way — and the prospect of deteriorating household finances will also be in focus. Analysts are at present expecting revenue of about £5bn for the six months to September, with operating profit of £350m.
The emergence from lockdown has been key for Associated British Foods. In the last full year before the pandemic, two-thirds of ABF’s annual operating profit came from clothing, in the form of cut-price fashion retailer Primark.
In the year to September, analysts expect it to be comfortably less than half the group total after lockdowns forced its 380 shops across Europe and the US to close for extended periods. But stores traded strongly when they were open, and investors will want reassurance that is still the case.
Another earnings announcement to watch is Anglo-Swedish drugmaker AstraZeneca on Friday, particularly after Pfizer last week raised its revenue forecast for its Covid-19 vaccine to $36bn in a bullish results statement.
Investors want AstraZeneca to clarify if it even plans to sell its Covid shot after the pandemic is over — the jab still has not received approval in the world’s largest pharmaceutical market, the US.
But AstraZeneca makes its money with its other products — particularly cancer treatments — and analysts expect a rise in sales and earnings per share from the third quarter last year.
Economic data
This week’s economic schedule features US and Chinese inflation data, Japan has GDP figures out, as does the UK — where quarterly and monthly figures are expected to paint contradictory pictures of the recovery from coronavirus — trade figures and the Zew survey from Germany, Australian job numbers plus another round of central bankers making speeches.
Personally, I would rather hear your views, not on the economic outlook, but what you think about this newsletter. You can email me at jonathan.moules@ft.com.
Key economic and company reports
Here is a more complete list of what to expect in terms of company reports and economic data this week.
Monday
Japan, current account and trade balance
Switzerland, monthly unemployment data
Results: Henkel Q3, PayPal Q3, SoftBank Q2
Tuesday
France, monthly balance of trade figures
Germany, trade balance data and Zew economic sentiment survey
Mexico, consumer price index data
Persimmon trading update
UK, British Retail Consortium monthly retail sales report
US, producer price index statistics
Results: Associated British Foods FY, Aveva H1, Bayer Q3, Coinbase Q3, Direct Line Q3, Mediaset Q3, Munich Re Q3, Nissan H1, Porsche Q3, Salvatore Ferragamo Q3, Swiss Life Q3
Wednesday
China, monthly inflation data
Germany, CPI figures
Italy, industrial production data
Russia, Q3 GDP data
US, monthly CPI and weekly jobless figures
Results: ABN Amro Q3, Adidas Q3, Ahold Delhaize Q3, Alcon Q3, Allianz Q3, Continental Q3, Crédit Agricole Q3, EDF Q3, Eon Q3, Halfords FY, Infineon Technologies FY, Marks and Spencer H1, NTT H1, Walt Disney FY
Thursday
EU, European Central Bank’s monthly economic bulletin
Taylor Wimpey trading update
UK, monthly and Q3 GDP estimate, trade balance, industrial production and index of services
Results: Aegon Q3, ArcelorMittal Q3, Aviva Q3, Bechtle Q3, Geox Q3, Mazda Q2, Pirelli Q3, Qinetiq H1, Qualcomm Q3, RWE Q3, Siemens FY, Singapore Airlines H1, Suzuki Q2, Tencent Q3, Uber Technologies Q3, Zurich Q3
Friday
EU, industrial production data
India, monthly CPI figures
Japan, monthly PPI data
Results: AstraZeneca Q3, Burberry Q2, Deutsche Telekom Q3, Lenovo Q2, Mizuho Financial Group Q2, Rakuten Q3, Sumitomo Mitsui Financial Group Q2, Toshiba Q2, Xero Q2
World events
Finally, here is a rundown of other events and milestones this week.
Monday
The central committee of the Chinese Communist party gathers in Beijing to set China’s agenda at their sixth plenum
EU, European parliament internal market and consumer protection committee hears evidence from Facebook whistleblower Frances Haugen
Global Entrepreneurship Week, an annual celebration of start-ups, begins
Asia-Pacific Economic Cooperation (Apec) ministerial summit opens. Although officially hosted by New Zealand, the gathering will be held entirely online
US to reopen its airports to vaccinated passengers arriving from China, India, the UK and many other European countries
Tuesday
Anniversary of the fall of the Berlin Wall
The EU’s Ecofin Council of economic and finance ministers is held in Brussels
The 41st session of the general assembly of United Nations Educational, Scientific and Cultural Organization (Unesco) begins in Paris
Wednesday
European Central Bank’s governing council holds a non-monetary policy meeting
Thursday
Remembrance Day in numerous countries (Veterans Day in the US) marks the anniversary of the end of first world war
Friday
Nepal, first round of parliamentary elections
US, court hearing begins in Los Angeles for singer Britney Spears’ conservatorship
The London Jazz Festival begins
Saturday
UK, Lord Mayor’s Parade in the City of London, commemorating the right bestowed on the citizens of the Square Mile by King John to elect a leader.
Sunday
Bulgaria, parliamentary elections
Italy, Association of Tennis Professionals Finals begin in Turin
UK, Remembrance Sunday commemorations at the Cenotaph in central London
Source: Economy - ft.com
