Next and supermarkets to report on disrupted Christmas trading

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Tuesday will bring the first major announcements of a month that is traditionally packed with retail updates after the key Christmas period.


Clothing retailer Next PLC (LON:NXT) is the biggest name in the diary, with a trading statement that should provide plenty of insight into how the chain has fared over a festive season beset by lockdown measures and store closures.


The FTSE 100-listed company previously upgraded its profit forecasts for the full year after the third-quarter was boosted by its online operation, so investors will be hoping it has performed a similar feat across the last few months of 2020 as lockdown measures have kept customers at home.


Next previously forecast a full-year pre-tax profit of GBP365mln while net debt was also projected to fall by GBP487mln to GBP625mln, so shareholders will be watching to see if the latest round of disruptions has caused any alteration to these numbers.


Morrison and the supermarket sector


There will also be a supermarket industry spending report from Kantar, with an individual update also scheduled from WM Morrison Supermarkets PLC (LON:MRW).


Bradford-based Morrison’s may have fared better than many retailers during lockdown as the government’s pandemic restrictions drive people’s cash away from restaurants, cafes and pubs and into supermarket coffers.


UK supermarkets enjoyed their best month ever in November, according to Kantar’s previous report, with a boost from early Christmas shopping and a second national coronavirus lockdown resulting in GBP10.9bn being spent in-store and online over the four weeks to the end of November.


December is expected to set a new record, with Kantar projecting almost GBP12bn will be spent this month, roughly GBP1.5bn more than last year.


As for Morrison’s, there may also be interest in the progress of its partnership with Amazon, which allows consumers to order its groceries and other products for delivery through the e-commerce giant’s platform.


Georgia run-offs


US election news continues to rumble on, and on Tuesday there will – or maybe ‘may’ is a wiser word – be results from two ‘run-off’ elections in the state of Georgia.


These were called as both contests to decide who will represent the Peach State in the Senate fell below a 50% majority in last year’s election, so a clearer mandate is needed.


Republican incumbent David Perdue is up against Democrat Jon Ossoff, while in a special election, Republican appointee Kelly Loeffler is defending her seat against Democrat Raphael Warnock.


It’s a big deal and polling is too close to call, meaning the market is likely to be injected with some new momentum whichever way the votes go, as a win for the Republicans in either seat will mean they keep hold of the Senate majority, while the prospect of the Democrats taking a majority would be significant for the administration of President-Elect Joe Biden.


A two-seat win for Georgia on Tuesday will mean the Senate will be split 50-50, giving Vice President-Elect Kamala Harris the casting vote.


“With the holiday out of the way, I would not be surprised if a lot of packed-in risk premium continues to come off the curve, even more so if the Democrats manage to steal that 50th Georgia Senate seat tomorrow,” said Stephen Innes, chief global market strategist at Axi.


This comes as a jaw-dropping tape emerges of President Trump seeming to put pressure on Georgia officials to “find” votes for the Republican candidates.


Meanwhile, there are also rumblings as current Veep Mike Pence begins the vote-counting process in Congress that he could exclude those states where President Trump is arguing that the ballots were rigged, not to mention a handful of Republican senators proposing the creation of an election commission to investigate claims of voter fraud in certain states.


Significant announcements expected for Tuesday January 5:


Trading announcements: Next PLC (LON:NXT), WM Morrison Supermarkets PLC (LON:MRW)


Macro announcements: US ISM manufacturing data

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