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What can investors expect in October?

Nicholas Hyett takes a look ahead to what investors can expect in October.

Important notes

This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

At the time of writing, the UK is scheduled to leave the EU, with or without a deal, on 31 October.

But for those weary of the Westminster drama, October will also see a host of well-known names report results, across retail, technology and consumer goods.

Shops in the spotlight

There’s been no escaping the gloomy commentary surrounding the UK high street lately. Almost 3,000 stores shut up shop in the first half of this year, with several big names reporting major losses, or closing completely.

That will focus investor attention on high street stalwart Next, the most valuable clothing retailer on the London Stock Exchange. A strong first half led to profit expectations for the year as a whole being upgraded, but Autumn trading is looking weaker. The group’s been leaning heavily on online sales in recent times, and given the appalling condition of the high street, we expect that to continue.

Speaking of online retail, digital experts ASOS will also be revealing full year results. It’s been a tumultuous year for the group, with three profit warnings in seven months – the last of which was in July.

Botched execution of expansion projects in the US and EU – key regions for ASOS’ future growth – are to blame. The projects are now said to be completing at the end of Autumn, and investors will be hoping those goal posts haven’t been moved again.

All-in-all, an interesting month for all things retail, both on and off the high street.

Latest Next share price and how to deal


Latest ASOS share price and how to deal

Beverage companies getting a round in

A round of results is expected from some well-known drinks companies. Perhaps most interesting is AB InBev, the world’s largest brewer. If you’ve ever had a Budweiser or Corona, you have this company to thank. The group hit headlines recently, as it gears up for a second attempt to list part of its Asian business in Hong Kong for $5bn.

The group’s saddled with an enormous debt pile, following the acquisition of SABMiller in 2016, and the IPO is needed to ease the burden.

AB InBev isn’t the only drinks company causing a stir. Diageo announced on 19 September that it continues to monitor US/Europe trade tensions over whisky, as well as ongoing spats between Trump and China. China’s booming spirit market is important to Diageo’s growth strategy, Asia-Pacific accounts for around 21% of net sales at the moment, with growth driven by China.

The group expects first half organic operating profit growth will be broadly in-line with net sales growth – but only if those macro conditions behave themselves.

Latest ABInbev share price and how to deal


Latest Diageo share price and how to deal

Stream of results

We’re due to hear about all things technological next month - from Spotify to Snap.

One of the other big names is streaming giant, Netflix. The group will be spilling the beans on third quarter performance. The half year was a mixed bag, with second quarter revenues and profits well above market expectations – at $4.9bn and $706m respectively – but subscriber growth disappointing.

Subscriber numbers will be in the spotlight again in October. Netflix missed the mark by almost 50% last time, so those watching closely will hope that gap hasn’t got any worse.

It’s a hot topic because competition in the sector is ramping up. Disney’s streaming service will launch later in the year, and big names like Apple and Amazon are already in the mix. No doubt Netflix investors will be watching the burgeoning competition with a watchful eye.

Netflix spent over $13bn on content last year to keep customers glued to the service, as well as enticing new ones. As the marketplace becomes more crowded, it’s essential to be the curators of “must-see” content – so we’ll be watching to see if that budget increases.

All that spending is seeing Netflix churn through cash, and it’s having to borrow to fund the habit. In itself debt’s not the end of the world, but cash flow needs to turn positive eventually and the sooner that happens the better.

Latest Netflix share price and how to deal


Latest Apple share price and how to deal


Latest Disney share price and how to deal


Latest Amazon share price and how to deal

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This article is not advice or a recommendation to buy, sell or hold any investment. No view is given on the present or future value or price of any investment, and investors should form their own view on any proposed investment. 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. Non-independent research is not subject to FCA rules prohibiting dealing ahead of research, however HL has put controls in place (including dealing restrictions, physical and information barriers) to manage potential conflicts of interest presented by such dealing. Please see our full non-independent research disclosure for more information.

Important notes

This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

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