The FTSE 100 has extended its recent advance, climbing from a low of 10,370 earlier this month to around 10,820. That momentum will be tested in the coming week as investors digest a batch of UK economic releases and corporate earnings from several heavyweight constituents.
UK data deluge
The Office for National Statistics will publish the latest employment figures on Tuesday, followed by September's consumer price inflation data on Wednesday. Economists anticipate that both headline and core CPI accelerated last month, driven by higher energy costs. The week concludes with retail sales numbers, which are expected to show an uptick in volumes for September.
These readings will inform the Bank of England's next policy decision later this month, with markets largely pricing in another rate hike. The data could also influence the pound and gilt yields, which in turn affect the index's multinational earners.
Barclays: investment banking drag
Barclays shares have been under pressure as concerns mount over its investment banking arm. After a solid start to the year, deal-making activity has slowed sharply, with volumes reportedly falling over 40% sequentially in the third quarter. The trend was echoed by US peers this week, as Morgan Stanley's investment banking revenue rose just 2% to $2.16 billion, missing estimates by $110 million.
Analysts project Barclays UK will report a profit before tax of £931 million, with its UK corporate bank contributing £291 million and its private bank and wealth management division adding £99 million. The upcoming results will be scrutinized for signs of further weakness in trading and advisory revenues.
Unilever: pricing power in focus
Unilever has staged a strong recovery, climbing from a low of 4,000p earlier this year to around 4,885p. The consumer giant's third-quarter update will be closely watched for evidence that its pricing strategy remains effective amid persistent inflation.
In the second quarter, underlying sales growth came in at 4.8%, with turnover exceeding €25.6 billion. Home care led the growth, followed by beauty and wellbeing. For the third quarter, analysts expect underlying sales growth of 4.8%, with volumes up 2.5% and prices up 2.3%.
Persimmon: housing headwinds
Persimmon shares have been volatile recently, surging in late September after the government announced a new homebuyer support program, then retreating as the initial enthusiasm faded. The housebuilder's upcoming trading update is likely to reflect a challenging environment, with elevated mortgage rates dampening demand and rising construction costs squeezing margins.
In the first half, Persimmon reported a 3% rise in profit before tax to £170 million, supported by a 7% increase in completions and a modest 3% uptick in average selling prices. Investors will be looking for any update on forward sales and cancellation rates.
Aberdeen Group: rangebound
Aberdeen Group, formerly known as Abrdn, has traded in a narrow band between 231p and 255p since July. The asset manager's third-quarter results, due on October 21, will provide insight into its revenue trajectory and asset flows.
In its last report, net operating revenue rose 2% to £643 million, while profit before tax increased 2% to £276 million. Assets under management stood at £576 billion. The market will be watching for any signs of sustained inflows or outflows, particularly in its investment and interactive investor divisions.
Overall, the FTSE 100's resilience will be put to the test as investors weigh the macro backdrop against corporate fundamentals. The earnings from these four companies will offer a snapshot of the UK economy's health across banking, consumer goods, housing, and asset management.
This article is for informational purposes only and does not constitute financial advice.
