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Fed decision looms for Wednesday, Dixons Carphone to report interims


The macro diary will be a key focus on Wednesday as the Federal Reserve makes its latest decision on interest rates alongside a smattering of inflation and PMI readings from the UK and US.

The Fed is expected to keep its policy unchanged and avoid providing more stimulus, however, like the European Central Bank it is likely to ramp up its dovish rhetoric and emphasise more fiscal support due to the ongoing effects of the pandemic on the economy.

However, the Fed can only so much, and investors will likely be looking to stimulus negotiations in Washington DC to pick up the slack.

Dixons calls up with interims

The retail sector will be in focus on Wednesday with technology retailer Dixons Carphone PLC (LON:DC.) scheduled to report its interim results.

Back in July, the electronics and mobile phone pedlar reported pre-tax profits more than halved to GBP166mln for the year to May 2, 2020, as the UK’s pandemic lockdown hit its mobile sales in particular, with overall revenues down 3% to GBP10.2bn.

But Dixons’ exposure to a strong market for household electricals in the UK and overseas has been a boon, with stuck-at-home consumers spending more on their homes while being locked down, with the group generating a hefty chunk of sales from appliances, home office equipment, TVs and gaming consoles and launches of the new Playstation and Xbox versions helping to offset the lack of sales from its travel stores and ongoing weakness in mobile.

”The big retail survivors of the pandemic are those who have embraced the accelerated shift to digital,” said Susannah Streeter, analyst at Hargreaves Lansdown.

“Dixons Carphone hasn’t just relied on shop bots and delivery slots to gain market share. Through the Shoplive platform customers have been able to book virtual appointments with assistants in store and see video demos for a whole range of electrical goods from the comfort of their sofas. That helped online sales triple while stores were closed. Even when the first lockdown ended, virtual tills were ringing at double the rate of last year.”

Significant announcements for Wednesday December 16:

Trading update: Petrofac Limited (LON:PFC)

Interims: Dixons Carphone PLC (LON:DC.), FRP Advisory Group PLC (LON:FRP)

Finals: Real Good Food PLC (LON:RGD)

Economic announcements: UK inflation, UK flash PMIs, US retail sales, US flash PMIs, Fed decision

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