Portfolio

Wednesday preview: ECB, Technology in focus

By Alexander Bueso

Date: Tuesday 20 Oct 2020

Wednesday preview: ECB, Technology in focus

(Sharecast News) - Financial markets' attention on Wednesday will be on the European Central Bank.


A raft of speakers, including ECB boss, Christine Lagarde, vice President Luis de Guindos and chief economist Philip Lane, are due to take to the podium.

To take note of, their speeches will come amid chatter from some traders regarding the possible need for increased stimulus, with the ECB's December policy meeting a likely venue to discuss that possibility.

Just the day before, the Bank of England's Gertjan Vlieghe had sounded a similar note when it came to the UK.

Against that backdrop, at 0700 BST the Office for National Statistics will publish consumer price data for September.

Barclays Research forecasts an increase in the year-on-year rate of increase in consumer prices from August's 0.5% to 0.7% in September.

In their view, companies have only partially passed on the recent reduction in value added tax "due to a mix of stronger than expected retail demand and a desperate grasp for cash to restore viable cash flows."



The market spotlight in the middle week in the corporate space will be on the technology space.

On home shores, cybersecurity outfit Avast was among the names that were due to update investors.

For the company's third quarter, UBS's Michael Briest had penciled-in growth in billings of 8.3%, with the same expected for the last three months of 2020 for a full-year outcome of $886m.

That was essentially in line with consensus for $887m.

In Briest's opinion, billings growth would centre attention.

The analyst expected the firm to keep guidance unchanged, further pointing out how out at the time of the company's interims its finance director had offered a "balanced" view on the impact from Covid-19 on the business, which had resulted in both positives and negatives for trading.

Across the Pond, the focus will be on Tesla's third quarter numbers, with investors likely hoping for another surprise quarterly profit, said Michael Hewson, chief market analyst at CMC Markets UK.

In July the company had posted a fourth quarterly profit in a row, albeit with the "sleight of hand" in the form of the sale of $428m of regulatory credits, he added.

The other point of focus will be whether Tesla chief, Elon Musk, still expects the firm to hit its 2020 target for 500,000 deliveries.

To take note of, media giant Netflix is due to deliver results overnight with risk appetite throughout the session likely to be influenced by the tech giant's results .

The company has guided towards 2.5m new subscribers although Hewson believed that management had chosen to be cautious in light of the easing of lockdown requirements at the time, guiding towards quarterly sales of $6.33bn.

Nonetheless, the analyst pointed out how the company "still has a host of great content, with a host of new offerings coming up in Q4, including season 3 of Star Trek Discovery, and season 4 of The Crown."

Wednesday 21 October

INTERIMS

C&C Group

INTERNATIONAL ECONOMIC ANNOUNCEMENTS

Crude Oil Inventories (US) (15:30)

GMS

Local Shopping REIT

AGMS

Duke Royalty Limited, DWF Group , Frontier Developments, Standard Life UK Smaller Companies Trust

TRADING ANNOUNCEMENTS

Antofagasta, SEGRO, William Hill

UK ECONOMIC ANNOUNCEMENTS

CBI Industrial Trends Surveys (12:00)

Consumer Price Index (07:00)

Producer Price Index (07:00)

Public Sector Net Borrowing (07:00)

Retail Sales (07:00)

..

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