View the article online at http://citywire.co.uk/money/article/a648660
Week Ahead: Tesco a festive winner as UK economy stumbles
Our preview of the main financial events of the coming week.
Beyond Britain’s shores, things are looking better.
US politicians may have skirted their way around the edge of the fiscal cliff rather than falling off the edge – reaching a deal to avert sweeping tax rises, but delaying a decision on spending cuts – but that’s still one less global economic concern.
In China, the most important of the emerging markets, the economy appears to have turned. The days of 10% annual growth, though, are gone.
And the continued existence of the 17-member eurozone is no longer being threatened on a daily basis, though concerns over the currency bloc’s fate and weak demand for British exports will remain an impediment to growth.
In the UK, though, we remain on ‘triple-dip’ watch. In the coming week some strong economic reports will be needed to prove the UK remains on course for growth after a feeble report on the dominant services sector hit economists’ desks with a thud on Friday.
A string of data due over the coming week on major companies and the wider economy will reveal whether the nation’s finances improved in the last part of the year.
Listed supermarkets Tesco (TSCO.L), Sainsbury (SBRY.L) and Morrisons (MRW.L) will reveal their Christmas trading to investors. Analysts expect Tesco to be the ‘winner’, thanks partly to a flattering comparison with weak previous trading from the supermarket, which has been struggling to hold onto market share.
‘Although we continue to expect volatility, we believe Tesco’s trading update will offer further evidence of the growing traction of the initiatives in its grocery offer,’ wrote Nick Coulter of Nomura in a note.
While agreeing on Tesco’s outperformance, Investec’s Dave McCarthy warned that overall ‘Christmas started slowly and never got going. Stores were quiet and consumers were cautious.’
A broader gauge of Christmas spending will come from the British Retail Consortium, which publishes its December sales monitor on Monday night. Howard Archer, an economist at IHS Global Insight, suggested that while there could have been a last-minute rush for Christmas presents, festive sales are unlikely to have been better than ‘adequate’.
News sponsored by:
Making the most out of Europe’s potential means seeing things differently. Learn more about how BlackRock’s focused approach to investing in Europe helps investors unlock the continent’s vast potential.
In this guide to investment trusts, produced in association with Aberdeen Asset Management, we spoke to many of the leading experts in the field to find out more.
More about this:
Look up the shares
- Tesco PLC (TSCO.L)
- J Sainsbury PLC (SBRY.L)
- WM Morrison Supermarkets P L C (MRW.L)
- Next PLC (NXT.L)
- Debenhams PLC (DEB.L)
- Marks and Spencer Group PLC (MKS.L)
More from us
- Fiscal cliff Q&A: what does it mean for investors?
- Friday Five: how the euro crisis could be re-ignited
- Bank of England unmoved by ‘triple dip’ threat
Tools from Citywire Money
From the Forums+ Start a new discussion
Weekly email from The Lolly
Get simple, easy ways to make more from your money. Just enter your email address below
An error occured while subscribing your email. Please try again later.
Thank you for registering for your weekly newsletter from The Lolly.
Keep an eye out for us in your inbox, and please add email@example.com to your safe senders list so we don't get junked.