The latest UK political turmoil hasn’t made much difference to the FTSE 100, but I didn’t really expect it to. Politicians come and go, but businesses and stock markets barely notice them over time.
The next meeting of the Bank of England’s Monetary Policy Committee isn’t until 4 August, so we don’t expect any interest rate adjustments in July. But there are some company updates that could shed light on how various market sectors are doing.
Property direction
Full-year results are due from Purplebricks on 12 July. A lot of houses have been going up for sale round where I live, and they’re selling quickly. Is it pent-up demand from the pandemic helping stave off the effects of rising interest rates? House prices are rising, and Persimmon recently reported strengthening gross margins.
First-half results from FTSE 100 housebuilders are due in early August, and Purplebricks could give us a clue to how they might go.
Investment management
On 21 July, we should have updates from three firms in the financial services and investment management business. They’re AJ Bell, Close Brothers Group, and Brewin Dolphin Holdings. All three are FTSE 250 members, but they should give us some insight into investor confidence.
The whole investment management business has been suffering from cash outflows in 2022, as investors seek safety. News on how that’s progressed in the first half could itself feed back into investor confidence.
Consumers
Everyday consumers are the ones hit hardest by rising prices. So who better to give us some feedback on that than Unilever? The consumer brands giant is due to update us on its first half on 26 July.
The Unilever share price had been on a slide, but it’s been picking up since March. The company has also been buying back its own shares, so the board doesn’t appear to share any market pessimism.
I think any update on consumer spending could have an effect on overall FTSE 100 market sentiment.
The banks
Perhaps the most important updates during July will be those from the FTSE 100 banks. Between 27 July and 29 July, we’ll have interim figures from Lloyds Banking Group, Barclays, and NatWest Group.
What will I be looking for? Primarily, dividend news. Banking dividends reflect the cash flow in the whole financial sector. And the financial sector is a key indicator of the state of the overall stock market.
I’ll also be looking for updates on key liquidity measures, expecting them to tighten a little. In general, I think banking sentiment could be pivotal to the market overall.
Oilies
Finally, I’ll be paying close attention to interim results from Shell on 28 July and BP on 2 August. Fuel prices are key right now, and I want to see how much of oil company profits really are short term and due to the elevated oil price.
If Shell still sees a sustainable long-term market for oil, and expects prices to stabilise in the coming months, I think that could help with investor confidence too.
