Look Ahead 24/10/23: UK, US, German, Japan PMI; Barclays, Spotify, Microsoft, Alphabet earnings

(Video Transcript)

A feast of earnings reports

Hello and welcome to the Look Ahead to Tuesday 24 October 2023. I'm Angela Barnes and you're watching IGTV. Earnings season is in full flow this week and UK companies also join in, most notably with earnings from the banking sector and the tech sector as well.

Earnings and the ongoing conflict in the Middle East will be the main drivers along with the European Central Bank (ECB) rate decision and US third-quarter (Q3) gross domestic product (GDP).

It promises to be a busy week indeed with volatility at multi-week highs as well. Let’s take a look at what to watch out for on Tuesday 24 October, specifically starting in Japan and at 1.30am we'll have September flash PMI data with manufacturing to rise to 49 from 48.5 and services to fall to 52.9 from 53.8.

At 7am, we have UK unemployment rate data for August with the unemployment rate expected to hold at 4.3%. Sterling has struggled to find a direction as investors await this data. The currency has been consolidating for over aweek. Its interest rates are expected to remain unchanged by the Bank of England (BoE) monetary policy meeting next week.

German, UK and US PMI data to drop

At 8.30am, we'll have German purchasing managers index (PMI) September flash data with PMI expected to rise to 41.5 from 39.6. And then at 9.30am we'll have UK PMI data for September flash reading with manufacturing PMI to rise to 45 and services PMI to rise to 49.8 from 49.3.

And then we've got at 2.45pm US PMI data for September flash reading with manufacturing expected to fall to 49.5 from 49.8 and services to fall from 50.1 to 49.8.

And then on Tuesday we have a raft of corporate updates to keep across with quarterly earnings from Barclays, Spotify, General Motors, Coca-Cola, Visa, Microsoft, Alphabet, General Electric and Snap. So on the corporate front, as I said, we'll have a host of updates from those companies.

GM to delay making electric trucks till 2025

Let's just have a look at General Motors (GM) and if I just pull up the price chart for you. Investors will be paying close attention to General Motors after it said last week that it's delaying production of all electric trucks at Orion Assembly in suburban Detroit until late 2025.

While GM says the change is to better manage capital investments and implement improvements in an effort to make the new electric vehicles (EVs) more profitable, GM is now assessing stock on the IG platform and its share price, as you can see, is currently down 0.71% pre-market year to date. Its stock has fallen about 11%.

The latest production delay is the latest sign of potential trouble for the ambitious multi-billion dollar plans of traditional automakers to move to EVs. If we move on to Microsoft, and I'm just going to pull up the Microsoft price chart for you again, it's an all-session stock on the IG platform.

Microsoft Office to adopt AI 'copilots'

Revenue numbers for cloud segments will remain in focus at Microsoft. Investors will also be keeping across artificial intelligence (AI) chatter after it revealed a ChatGPT-style AI assistant embedded into its Office apps, which will become available from 1 November 2023 following trials.

Microsoft 365 Copilot will be able to summarise meetings held in Teams for anyone who chooses not to attend or indeed can't attend. It will also be able to draft emails, create Word documents, spreadsheet graphs and a whole lot more.

If we look at the price chart, shares up 0.13% just up marginally today on the all-sessions IG platform year to date. Its share price is up about 37% though, so we'll see how investors react to its latest financial update as well this week.

Moving on, let's have a look at the Alphabet price chart: again, an all-session stock on the IG platform. The AI narrative will also be watched when Alphabet reports its latest quarterly results as well as week at the end of July.

The company reported better than expected revenue and profit driven by growth in its cloud computing unit. Second-quarter revenue rose 7% to $74.6 billion from $69.7 billion in the year earlier period. For the fourth straight quarter, Google's parent company reported growth in the single digits as it faced a pullback in digital and spending, reflecting concerns about the economy.

While analysts don't expect growth to hit double digits again, though, until the fourth quarter. While the tech giant's share price is down today as noted at 0.27% in the red, year to date it has surged about 54%.

Well, that's your Look Ahead to Tuesday, 24 October. Do tune in for all our other shows. We have Beat the Street every afternoon before the Wall Street Open at 1.30pm London-time. We also have Early Morning Call with IG's Jeremy Naylor at 7.30am. Thank you for watching.