Hello and welcome to the working week.
As has been noted in this newsletter, 2022 is a year for significant votes. Some were expected, some were not. Some have more legitimacy than others. This week, there will be much analysis of this latter point.
The most significant of these will be a process of installation rather than election. China’s Communist party begins its five-yearly congress on Sunday, the most notable item of which will be the handing of a historic third leadership term to president Xi Jinping. The prospects are not good — “a tragic error”, according to FT chief economics editor Martin Wolf.
A pressing concern for Xi’s government is the crash in the housing market, which along with the zero-Covid policy and difficult economic conditions has stalled China’s run of strong growth, which will for the first time since the early 1990s fall behind the rest of Asia this year, according to the World Bank. Unleashing the Chinese consumer to spend more is the obvious way to restore growth. The problem for Xi and his senior lieutenants with this solution is that doing so will mean relinquishing some of their political power.
Before all that comes another issue of tension for Beijing. Monday is the National Day public holiday in Taiwan and the country’s softly spoken president Tsai Ing-wen will be giving an address.
China claims Taiwan as its territory. Nicola Sturgeon’s Scottish National party would like to no longer be considered the territory of the British government. Sturgeon will be making this clear in the closing speech to her party’s conference on Monday. A day later, the SNP’s risky plan for another referendum on the matter will be heard by the UK’s Supreme Court.
The British government has refused to grant powers to hold another vote. The Supreme Court’s two-day hearing is due to conclude on Wednesday.
If the court agrees with the UK government, it would not necessarily be the end of the SNP’s bid for a second referendum, but it would almost certainly scupper Sturgeon’s stated goal of holding a vote in October 2023 because she would have to pass legislation.
Talking of second chances, but away from the discussion of votes, this Friday will see London’s landmark Battersea Power Station reopen in a new guise, as a retail, leisure and residential building.
This feels like good news in disrupted times. Expectations are higher than the building’s four chimneys, one of which you will be able to ride up — for a fee — in a glass elevator. And the £9bn renovation, completed after numerous previous attempts failed, is so cool that Apple is taking a few floors for its British workforce. Whatever your view, the restoration of this iconic 1930s building is buoying the local housing market.
Thank you to everyone who writes into The Week Ahead. Send your comments to jonathan.moules@ft.com or hit reply to the newsletter email.
Economic data
It’s a quieter start to the week for the markets with the US closed for Columbus Day. However, we’ll make up for it as the week progresses.
Inflation is a theme (will it ever not be?), led by data from the US and China. The Fed will also release the minutes from its September meeting, which will be watched for indications about its future intentions in monetary policy tightening to quell the rising cost of living.
The IMF and World Bank annual meetings also begin in Washington on Monday, running all week.
Companies
This week will be a mixed bag of results, but a couple of sectors will feature prominently as the reporting season cranks up.
A buoyant jobs market is expected to have helped recruitment firms PageGroup and Robert Walters secure higher quarterly net fees. But their trading updates will be watched for signs of a slackening in demand as inflation and recessionary fears rise.
The week will end with a rush of third-quarter results from Wall Street banks, likely to fuel concerns about a US recession. Citi, JPMorgan Chase, Wells Fargo and Morgan Stanley are all reporting on Friday — Bank of America and Goldman Sachs will follow next week — and analysts expect these six institutions to collectively set aside more than $4bn to cover potential losses from bad loans.
On the plus side, third-quarter revenues at JPMorgan, BofA, Citi and Wells are expected to have risen year on year by around 4 per cent thanks to higher net interest income following the Fed’s rate rises, our US banking reporter notes. Goldman and Morgan Stanley, which derive a greater share of earnings from investment banking, are likely to report a drop in revenues given the drop off in dealmaking activity.
Finally, a plug for an FT Live event in London (and online) this Wednesday. Join television presenter Trinny Woodall, English football player Ellen White and others at the Women at the Top Europe Summit at the Kimpton Fitzroy. As a newsletter subscriber, you can claim a 10 per cent discount to the in-person event using promo code Newsletters22. Register for your pass today.
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
Egypt, monthly inflation figures
Germany, European Central Bank chief economist Philip Lane gives opening remarks at the ECB Conference on Monetary Policy in Frankfurt
US, IMF and World Bank Annual Meetings begin in Washington
Results: Hollywood Bowl FY, Tata Consultancy Services Q2
Tuesday
Meta Platforms holds its annual Connect event showcasing new augmented and virtual reality products, including the much touted headset codenamed Project Cambria.
IMF publishes its Global Financial Stability Report assessing the global financial system and markets
Japan, monthly trade balance data
UK, British Retail Consortium-KPMG retail sales monitor plus monthly labour market figures. Also, Institute for Fiscal Studies publishes its Green Budget, an assessment of the country’s public finances and growth prospects
Results: Givaudan Q3, LVMH Q3, Marston’s FY, Reach Q3 trading update, Robert Walters Q3 trading update, YouGov FY
Wednesday
G20 finance ministers and central bank governors meet as part of this week’s IMF and World Bank annual meetings
India, monthly industrial production and consumer price index (CPI) inflation data
Japan, machinery orders data
UK, GDP, industrial production and trade balance figures
US, Federal Open Market Committee minutes from its last rate-setting meeting
US, September producer price index (PPI) inflation figures
Results: Barratt Developments trading update, Ikea FY, Kin + Carta FY, PageGroup Q3 trading update, Qinetiq Q2 trading update
Thursday
Argentina, September CPI inflation rate data
EU, eurozone industrial production figures
Germany, September CPI inflation rate data
International Energy Agency publishes October oil market report
UK, RICS September residential property market survey
US, September CPI inflation rate figures
Results: easyJet FY trading update, Entain Q3 trading update, Fast Retailing FY, Hays Q1 trading update, Suedzucker H1, TSMC Q3
Friday
China, September CPI and PPI inflation rate figures plus monthly trade data
EU, eurozone trade figures
France, CPI inflation rate data
US, monthly retail sales figures
Results: Ashmore Group Q1 trading update, Citi Q3, JPMorgan Chase Q3, Morgan Stanley Q3, Wells Fargo Q3
World events
Finally, here is a rundown of other events and milestones this week.
Monday
Canada, Thanksgiving Day national holiday
Estonia, European Commission president Ursula von der Leyen speaks at the Tallinn Digital Summit
North Korea, 77th anniversary of the founding of the ruling Workers’ Party of Korea
Sweden, Nobel Prize for economic sciences announced
Taiwan, National Day public holiday
UK, Scottish National Party leader Nicola Sturgeon addresses her party on the closing day of its annual conference in Aberdeen
US, Columbus Day federal public holiday
Tuesday
Czech Republic, informal meeting of EU energy ministers in Prague
UK, Supreme Court due to begin hearing arguments for and against the Scottish National party’s plan to legislate for a referendum without the Westminster government’s permission
Wednesday
Australia, events to commemorate the 20th anniversary of the Bali bombings in which 202 people died, including 88 Australians and 38 Indonesians
Belgium, meeting of Nato defence ministers begins in Brussels, chaired by Nato secretary-general Jens Stoltenberg
Spain, National Day public holiday
Thursday
Iceland, Arctic Circle Assembly begins in Reykjavik
Taiwan due to end mandatory Covid-19 quarantine for arrivals. Instead they will be asked to undergo a seven-day period of self-initiated prevention measures.
UK, winner announced for the RIBA Stirling Prize, one of the country’s most prestigious architecture awards
Friday
Saudi Arabia, LIV Golf Invitational tees off at the Royal Greens Golf & Country Club in Jeddah
UK, London’s iconic Battersea Power Station reopens as a retail and leisure hub
Saturday
Japan, first Parkour World Championships begin in Tokyo
Sunday
Australia, Twenty20 World Cup cricket tournament begins in Geelong
China, the Chinese Communist party begins its five-yearly congress during which president Xi Jinping is due to secure a historic third leadership term
Source: Economy - ft.com
