However, there may be more excitement towards the end of the week with the release of UK GDP and retail spending data, plus jobless and housing numbers from the US. Either way, it is difficult to see what would generate sufficient enthusiasm for markets to break out of their current trading range.
GlaxoSmithKline is the first major company to report, revealing its second quarter figures on Wednesday. It is expected to deliver pre-tax profits of £8,750m, compared with £3,728m last quarter. However, it has said that it will take a £1.57bn charge in this quarter to resolve a number of legal battles. Its blockbusting diabetes drug Avandia has been under investigation by FDA for more than three years over its potential side-effects. It is hoped that the charge may bring some stability and put a cap on the slide in the share price. Shares have risen from a low of 1,095p in early July, but have had a volatile three years. The group still pays a chunky dividend of 5.2%.
Galiform also reports on Wednesday. Its pre-tax profit expectations remain at £72m, up from £4.7m. It said in March that demand would remain constricted throughout 2010, but that it hoped to improve its market share. It is expected to continue its policy of withholding its dividend, in place since 2008. It closed on Friday at 66.85p, having hit a low of 56.75p at the end of June.
On Thursday, Sports Direct International reports its full-year results. The market is expecting a substantial turnaround in pre-tax profits to £109m from £10.7m. Rivals such as JJB Sports have reported a significant improvement in sales.
However, it is under a number of clouds: the group is still subject to an investigation from the Office of Fair Trading on allegations of depressing competition in the sports retail market. It was cleared in February in a separate investigation into the purchase of 31 stories from JJB. The most recent news on the group was its negotiations with Blacks Leisure. As a 28.5% shareholder it recent blocked a proposed fundraising, which many saw as a pre-cursor to a takeover.
Outsourcing group Capita also reports today, expecting to show a rise in interim pre-tax profits from £135m to £362m. The group had been expected to suffer during public sector cutbacks, but Richard Marchant, head of local government strategic partnerships at Capita was reported in the Guardian as saying: “This year we have probably seen a 100% increase in opportunities [compared with 2009] and I suspect we will see another 50% increase in the following year."
He said that the number of opportunities for local authority contracts has already doubled this year and they see the healthcare market as "vast and potentially lucrative". However, analysts remain unconvinced. A recent UBS report downgraded Capita from “neutral” to “sell” and analysts have been troubled by the loss of the deal to administer the London Congestion Charge scheme. It is also highly rated at around 24x earnings. It hit a peak of 821p in April, but is now back at 749p.
Yell is the largest company to report on Friday. It is expecting to announce pre-tax profits for the first quarter of £209m, compared to £18.5m for the same period last year. The group returned to profit in May, announcing full-year pre-tax profit of £70.3m, compared with a £1bn loss a year earlier. However, at the same time the group announced that both its chief executive and chief financial officer would be leaving the company in 2011. Equally, although it has cut back on its debt, it remains high at £3bn. The share price has slid from highs of over 600p and was still bumping along the bottom at close on Friday at 27p.
Monday
All quiet
Tuesday
The Confederation of British Industry (CBI) Industrial Trends Orders data will give some indication of the economic expectations of the manufacturing executives in the UK. The expectation is that it will fall from -23 to -25, showing executives more negative on the economy.
In the US, housing starts are expected to have fallen marginally between May and June. Although there is some seasonal adjustment, this provides another insight into the health of the US housing market.
Wednesday
In the morning, the Bank of England Monetary Policy Committee reveals the minutes from its last meeting. Analysts will be watching to see whether Andrew Sentance (the MPC member who voted for a rise in rates last month) has won any support from his fellow members.
In the afternoon, all eyes will be on Ben Bernanke’s speech as the chairman of the Federal Reserve gives his assessment of the strength of the US economy.
Thursday
A raft of European data will provide some clues as to whether the Greek bailout has fatally harmed European economic growth. PMI data from the Eurozone as a whole, plus a number of the individual countries, is expected to show a slightly downward trend. Retail sales data in the UK is also expected to show a negative trend.
But the real test for markets will be the US jobless claims. They are expected to rise from 429,000 to 445,000. Any higher will have markets extremely worried. They need to feel the US is recovering and data has been getting weaker. The same is true for existing home sales. These are also expected to drop, but anything more than a seasonal tick-down will create jitters.
Friday
With so much to digest from Thursday, markets will still have to swallow UK GDP data on Friday. Markets are expecting a rise from 0.3% to 0.6%. Expect a volatile end to the day if there are any surprises.
