After a fairly disappointing month of August in terms of earnings, the markets are ready to bounce back! In this week’s edition, we take stock of the rising issue of inflation in Europe and explain why it matters for your portfolio. We’ll also shine a spotlight on the auto sector and highlight a few earnings reports in the coming days.
For several months now, investors have been carefully watching inflation (a global rise in prices). In America, the inflation rate is now hovering around 5%. Central banks are trying to reassure us all that this situation is only temporary. According to them, the inflation rate is unusually high due to pandemic supply chain problems, and a boomerang effect after 2020 weakened the entire global economy.
In Europe, inflation is still relatively moderate, at 2.2% in July. This week, several countries will publish their inflation rates again, including Germany and Belgium on Monday, August 30th, and France, Italy and the entire eurozone the next day, Tuesday, August 31st. Keep your eye on the inflation rate in Britain, too, which is declining but still remains under high tension.
Did you know? You can try to prepare for the possible negative effects of inflation by investing in ETFs designed for this purpose. For example, you’ll find the USD Inflation-Linked Bonds ETF (Lyxor) on BUX Zero. It allows you to hold a basket of bonds that aim to protect your money against inflation.
Sector to watch in Europe: automotive
The auto industry is under pressure at the moment. It is paralysed by the global microchip shortage which is slowing down production and causing a reduction in sales. Analysts estimate the industry could lose a total of €90 billion this year! On top of that, the closure of many factories led to a considerable slowdown in the last year.
On Wednesday 1st September, the Committee of French Automobile Manufacturers (CCFA) will take stock of the French car market. Their data will tell us statistics like the number of new registrations in France. Keep your eye on French car makers like Renault.
Earnings this week
On Monday, August 30th, Zoom will report its quarterly figures after the market closes. So, what can we expect from the company that made working-from-home easy? Analysts expect the company’s growth to continue at a high pace, with profit estimated at $0.81 per share. Beyond that, the unified communication sector (UCaas) as a whole, should grow by 23.6% until 2028!
Next, it will be Asana’s turn to present its quarterly figures on Wednesday, September 1st. Asana is a workplace collaboration tool which should also benefit from the boom in home working. The stock is already up 164% since the start of the year.
Finally, the French group Pernod Ricard will reveal its earnings on Wednesday. The outlook is quite uncertain for the company, as fears of tightening regulations on the spirit industry in China could squeeze profits.
Economic and results calendar
Monday – Economic sentiment and inflation in the eurozone. Inflation rate in Belgium and Germany. Retail sales in the Netherlands. Quarterly figures from Zoom.
Tuesday – Inflation rate in France, Italy and the eurozone. Unemployment rate in Germany. GDP figures in Canada. Second quarter GDP in France. Manufacturing PMI in Ireland. Quarterly figures from Gaotu Techedu.
Wednesday – Unemployment rate in the eurozone and in Italy. Manufacturing PMI index in Spain, Italy, Germany, France and the United States. French automotive market statistics in August. Unemployment rate in Ireland. Quarterly figures from Asana and annual figures from Pernod Ricard.
Thursday – Unemployment rate in Spain and the United States.
Friday – Budget balance in France. Services PMI index in Spain, Italy, France, Germany, eurozone, Great Britain and United States. Figures for the automotive market in Germany.
We’ll be back next week with another edition of the BUX Breakdown. In the meantime, have a great week on the markets!
The BUX Breakdown was written by Clémentine Pougnet.
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All views, opinions, and analyses in this article should not be read as personal investment advice and individual investors should make their own decisions or seek independent advice. This article has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is considered a marketing communication.