Week Ahead: HMV set for a gloomy Christmas

In the last full week of a torrid year for markets, investors will focus on results from struggling retailer HMV (HMV.L) and the minutes from the Bank of England’s latest policy meeting.

HMV, famous for its Nipper the dog trademark, is to publish interim earnings on Monday, following a year in which its sales have slumped and its share price has tumbled 88%.

The 90-year-old group is likely to reveal that this weak performance has continued, according to Andrew Wade, analyst at Numis, in addition to providing an update on its efforts to refit 150 stores to focus on fast-growing portable digital products.

‘We continue to believe that the chain will struggle to trade itself out of difficulty in a structurally challenged space together with additional financing costs and tight credit terms and would continue to avoid,’ he added.

New year, old risks

Meanwhile, the unravelling of last week’s EU summit on the eurozone means that the region’s debt saga will doubtless remain in the headlines, and will continue to cast a shadow over the outlook for markets next year.

In a note to clients, analysts at Charles Stanley said: ‘Do we think that the risks, which became so elevated in 2011, will go away in 2012? Hardly!’

Figures on Italy’s trade balance and the eurozone current account on Monday will further focus minds on the debt crisis in the eurozone, which is staggering towards recession. On the same day, temporary power supplier Aggreko (AGGK.L) is to produce a trading statement.

Industry data on the UK retail sector are due on Tuesday, as are figures on German business morale and US building permits. Elsewhere, engineering consultancy WSP Group (WSPG.L) is to publish a pre-close announcement.

UK borrowing figures

On Wednesday, UK public sector borrowing figures will indicate whether the government is on track to meet its deficit-reduction targets, while the minutes from the Bank’s Monetary Policy Committee (MPC) may signal plans to boost its support for the economy.

Economists at Investec expect the deteriorating UK outlook to push the MPC into sanctioning a further £50 billion of stimulus, once the £275 billion target of its current package is reached, and a further £50 billion in May.

On Thursday, revised estimates for US and UK economic growth in the third quarter are due, as is a report on Britain’s current account.

Economists at Société Générale expect the Bureau of Economic Analysis to trim its annualised gross domestic product estimate for the period to 1.6%, in contrast to the market expectations that the bureau will maintain its previous reading of 2%.