Look Ahead 27/10/23: NatWest; Exxon; US PCE

(Video Transcript)

USD GDP, durable goods orders due

Let's take a look now at some of the events to watch out for on Friday 27 October 2023 and we begin with the Economic Diary where we are following up on what was a very strong day for gross domestic product (GDP) and durable goods orders in the United States on Thursday.

Are we looking for a strong GDP number out from France? This is the first look at third-quarter growth in the French economy. We also get consumer prices as well, so something else to watch out for in the early part of Friday's session.

Then, later on in the day, we get inflation data or core personal consumption expenditure (PCE) to be more precise in the US economy for the month of September.

That could be an interesting read as well bearing in mind that stronger than expected GDP number the day before is the risk on the upside for US inflation, personal income and spending and also the Baker Hughes recount as well.

Banks expand bad debt provision

Let's take a look at what's going on in terms of some of the corporate news headlines. In the UK, we get NatWest and also IAG. I think it's right to look at what's going on with NatWest.

While there is an uptick in the news around the increase in earnings coming through from net interest margin, the problem is that now with the economy as it is, there's an increase in the amount of money that these banks are putting aside to look for the protection for them against bad debt; bad debt provisions are being expanded.

Not only that, NatWest is coming to the duty of care and regulatory issue as well with the outgoing CEO Alison Rose and accounts back with Nigel Farage and also the regulators. Now there's a call from Farage to look at the way in which she was treated in the wake of her dismissal or leaving the company.

There are lots of dark clouds following NatWest, but the earnings out tomorrow could give us a better idea of what's happening in terms of the corporate balance sheet and profit and loss. As of today's low point, we're trading at levels not seen since 11 May 2022: that's a more than one-and-a-half year low for the NatWest Group.

European and US earmings out

In Europe, we have got numbers out from Air France-KLM, Electrolux, Holcim and Sanofi. So there's a nice small list of stocks to watch on Friday morning for us on the Early Morning Call.

In the US, it’s been a big week of reporting for some of these big oil companies on this side of the Atlantic. We saw TotalEnergies do well on Thursday. ExxonMobil and Chevron report earnings alongside Coldplay, Palm Oil and AbbVie.

Both Exxon and Chevron are all session stocks. It means you can trade that from 9am on Friday UK time and be following us again on this during the morning session ahead of Beat the Street. When we get those results, you can trade there.

I want to show you what's going on with ExxonMobil. This black line at the top here is a record high for all-time record high for the stock at $120.69. We're not too far away from that $107.59. So we're interested to see what comes through in terms of earnings tomorrow. And the expectations are high, I think, because the company continues to focus in on fossil fuels over renewables.

So that's a quick long list of what's happening tomorrow in some of the stocks to watch. And I'll be following up on those results from Chevron and ExxonMobil in the Beat the Street at 1.30pm UK time. Outside of that, do join me at 7.30am in the morning for the European Early Morning Call.