Look ahead to FTSE 350, other companies reporting & economic events from 12 – 16 June

Look ahead to FTSE 350, other companies reporting & economic events from 12 – 16 June

• Will interest rate hikes take a timeout Stateside this week?
• Ashtead looks to brush aside tightening lending in the US
• Can Halfords return to profit growth this year?
• Tesco sheds light on a grocery sector seeing record levels of price inflation

Federal Open Market Committee decision on interest rates – Wednesday 14 June

Susannah Streeter, head of money and markets:

‘’Eyes and ears will turn Stateside on Wednesday when the Federal Open Market Committee will make a big decision on monetary policy.  Fed policymakers are widely expected to pause and take a breath after the series of punishing rate hikes, but it doesn’t mean a downwards descent is being planned just yet.

Bets are being raised that the Federal Reserve is going to have to keep interest rates elevated for longer to tackle still sticky inflation, especially after the stronger than expected jobs report last month. Decision makers will be guided on the data and if it shows that prices are staying stubborn and the labour market is still tight, there still could be another rate hike this summer before any cuts are considered. However, the prospects of a US recession appear to be increasing with the latest snapshot of the mighty services industry, the ISM PMI reading, showing that growth slowed by more than expected in May.

So far, the US economy has shown considerable resilience and there is still significant liquidity washing around the financial system, which could help support investment and create a much softer landing.’’

Ashtead Group, Q4 results, Tuesday 13 June
Matt Britzman, equity analyst:

“Ashtead Group, which rents out construction and industrial equipment, is expected to put out a strong set of fourth-quarter results next week. Analysts are looking for top-line growth of a touch under 22% for the full year.

It’s been a bit of a choppy year for the shares, as fears around tightening lending in the US, with the troubles facing regional banks, weighed on sentiment. Available funding for construction projects is key and recent news from the Fed loan survey has been more positive, pointing to easing lending conditions. But demand for construction loans is also a factor, and that looks to be deteriorating.

More broadly though, there are a range of government initiatives helping on the demand side – particularly in the US. The US rental growth is expected to continue in the “mid-teens” next year, it will be good to see more fleshed-out guidance on this next week.”

Halfords, full year results, Thursday 15 June
Derren Nathan, head of equity research:

“Halfords’ management has set it on a journey to become a services-led business, with some 50% of sales already coming from its Autocentres business. But it’s not been proving to be an entirely smooth road. A profit warning in January saw the outlook for full-year pre-tax profits, to be reported in next week’s results, come down to £50-60m compared with prior guidance that it would be at the lower end of the £65-75m range. The driving force behind the slowdown has been a challenging labour market, with Halfords struggling to recruit enough skilled technicians to meet demand.

The company’s recent update focussed on the medium-term outlook over which the Board expects to grow pre-tax profits towards £100m. Forecasts don’t suggest any progress towards this target in the current financial year. So, investors will be zoning in on the shorter-term outlook, particularly for wages and other cost inflation, as well as checking how demand is holding up.”

Tesco, Q1 trading statement, Friday 16 June
Matt Britzman, equity analyst:

“Next week’s trading statement should shed further light on how consumers are dealing with mounting cost pressures. Industry data points to a sliver of hope that UK grocery inflation may be showing signs of easing, but it remains near record highs at 17.2% for the four weeks to 14 May. The owners of big brands have put through huge price hikes this year, so it’ll be interesting to hear how that’s impacting shopping patterns – a shift toward own-brand products is already underway.

Tesco’s focus on prices, with key promotions like Low Everyday Prices and Aldi Price Match, have helped it retain market share over the past few years. That comes at a cost, and the accelerated cost-saving programme is expected to move at some pace to help offset higher marketing spend and cost inflation. An update on the latter is hoped for next week.”

Among those currently scheduled to release results next week:

*Events on which we will be updating investors