The week ahead: Interest rates, HSBC, Shell, BP, Next

It's a week packed with trading updates from some of the biggest companies around, including £194bn Royal Dutch Shell and £150bn HSBC. There's an interest rate decision too.

Monday 30 October

Trading Statements

HSBC, Artilium, Lok'n Store

AGM/EGM

Mirada, Ideagen, Central Rand Gold, Severstal

Tuesday 31 October

Trading Statements

Ryanair, Great Eastern Energy Corporation, Cohort, BP, GETECH, Earthport, Egdon Resources, Plus500, Just Eat, Weir Group, Croda International, WPP

AGM/EGM

Terra Catalyst Fund, MaxCyte Inc, Angle, Kodal Minerals, JPMorgan Mid Cap Investment Trust, Altona Energy

Wednesday 1 November

Trading Statements

Millennium & Copthorne Hotels, Smurfit Kappa, Next, Paddy Power Betfair, Just Group, Standard Chartered

AGM/EGM

Thinksmart Ltd, Stanley Gibbons, South32 Limited, Greka Drilling

Thursday 2 November

This vote on where to set the Bank's base rate of interest is arguably the most important event on the economic calendar. This decision rests with the Bank's Monetary Policy Committee (MPC), tasked with assessing which rate of interest will best meet the inflation target (2%).  

The market has priced in a quarter point rate rise in November. This would represent the first increase in the base rate since 2007, when the full ramifications of the financial crisis were starting to be felt. It seems the era of ultra-accommodative monetary policy is over, with a rise from the record low 0.25% highly likely.

As inflation finally hits 3% and the economy remains on the right side of the contraction-expansion divide, calls for a tightening phase will grow. However, any increase in rates is likely to be very gradual, as Brexit uncertainty could still tip the UK into recession.

The Bank of England has stated that rates will not return to their pre-crisis levels of approximately 5%. In any case, growth remains weak and many economists believe that a rate hike is not necessary at this point.

After rising 16% since July, Royal Dutch Shell shares now trade at prices not seen since 2014. Key here is Brent crude’s move above $60 a barrel. It hasn’t been that high in over two years.

Analysts at Barclays rate the shares as ‘overweight’ and believe the shares could be worth 2,850p.

Ahead of Thursday’s third-quarter results, higher oil prices, great cash flow and progress on asset disposals and costs means there are now fewer questions marks around the dividend. A yield of 6% remains among the most attractive of the blue-chips stocks.

In terms of industry strength, The Society of Petroleum Engineers (SPE) just published its annual salary survey showing the first increase in salaries in the industry since 2014.

Trading statements

Royal Dutch Shell, Tate & Lyle, Indivior, BT, 3i Infrastructure Ltd, Lancashire Holdings, RSA Insurance, Morrison (Wm) Supermarkets, Howden Joinery, Amec Foster Wheeler

AGM/EGM

Croda International

Friday 3 November

Trading statements

Smith & Nephew, Informa

AGM/EGM

Frontera Resources

This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.