Stock markets will pivot on a clutch of major earnings out this week
Key equity market regions are trading higher in January, putting the onus on profits to justify the advance. After Apple rattled markets earlier in the month, the fear is other corporate titans may also downgrade forecasts as the global slowdown bites. As such, investors will watch earnings by a clutch of major firms on both sides of the Atlantic due this week. Ford will release its Q4 report on 23rd January, followed by Intel and Starbucks a day later. The biggest UK reports are easyJet’s first quarter update on Tuesday 22nd, Burberry’s Q3 statement on the 23rd and Vodafone’s on Friday on the 25th. After Ford issued weaker Q4 guidance than Wall St was expecting earlier in January, partly due to tariffs, consensus now points to EPS of $0.32 and revenues of $37bn. Intel’s EPS rebounded from a loss in Q4 2017 to $1.17 in its December quarter, on revenues up 11% to about $19bn, according to consensus forecasts. A relatively small Apple supplier, the focus will still be on the outlook for its critical business in China. Starbuck’s EPS is seen recovering to $0.66 with revenues up 10% to $24.7bn. Again, China will be eyed, particularly a demanding performance needed this time after a robust comparable quarter. The second profit warning in three months by easyJet rival Ryanair, last week sets the scene for the UK group. EZJ’s market position is generally seen as strong after a string of acquisitions, though its early quarters are notoriously volatile. Burberry is all-in on China, adding pressure as its CEO, Marco Gobbetti, tries to steer upmarket whilst a 50% capex hike that kicks in this year crushes margins. Vodafone’s all-important organic service revenue will be in focus, though the regional breakdown will be just as important amid a chronic decline in Europe.
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