Stock market week ahead: BHP Group, Persimmon, Just Eat & UK inflation

Inflation’s rearing its ugly head again.

Last week we got figures showing consumer prices in the US were up 5.4% in July compared to the same time last year. Remove food and energy from that measure and the reading came in at 4.3%, in line with economists’ expectations.

The US Producer Price Index (PPI) came in above expectations soon after, leaving investors in the annoying position of not really knowing whether inflation is calming down or still threatening to stick around.

Recent strong employment figures in the US suggest the economy is back on track though. This week, it’s the UK’s turn to show its hand and release consumer price index (CPI) stats.

In terms of companies, some of the biggest names reporting figures this week are: 

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Tuesday 17 August

• BHP Group - full year results
• Just Eat Takeaway - half year results
  

Wednesday 18 August

• Balfour Beatty - half year results
• Persimmon - half year results
• Nvidia - half year results
  

Thursday 19 August

• Antofagasta - half year results

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It’s important to highlight that this is just a look ahead, not a suggestion or recommendation that you buy or sell any of the securities mentioned. 

Remember that everyone has their own goals and unique financial circumstances. These, along with your tolerance for investment risk and time horizon, should inform the mix of assets in your portfolio. 

Our resource hub for investing in the stock market might make that blend a bit clearer for you and our guide on how to invest in stocks is a great start for first-time investors. And if you are still unsure of how to pick investments, speak to a qualified financial advisor. 

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Stocks to watch this week:

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BHP Group

Investors will be keen to hear more about a few big updates from the mining giant. 

Last month, boss Mike Henry said the company had hit record production levels at its Western Australia iron ore operations and its coal mine in Queensland. It also managed to eke out the highest level of copper its Olympic Dam project has seen since BHP bought it 16 years ago.

But it might be another announcement that investors want to get a bit more info on. Towards the end of July, BHP said it is set to supply Tesla with nickel, for use in the EV firm’s batteries. 

BHP chief commercial officer made the opportunity quite clear for investors, saying “Demand for nickel in batteries is estimated to grow by over 500% over the next decade, in large part to support the world’s rising demand for electric vehicles.”

Tesla has stated its intentions to spend more than $1bn a year on raw materials for batteries from Australia, thanks to the country’s responsible production practices, according to Reuters. Shareholders will be looking for signs of what the partnership means for BHP’s balance sheet.

And, as the sector looks to clean up its image and distance itself from planet-killing activity, BHP should shed a bit more light on the strategic review of its petroleum business. Pressure from shareholders to reduce its exposure to fossil fuels could see the firm merge the division with Australia’s Woodside Petroleum.

Persimmon

The UK housing market is currently experiencing a post-pandemic boom and Persimmon could be ready to ride the wave with its footprint and track record.

The pandemic hype lifted the Persimmon share price pretty consistently through til April but the stock market is a forward-looking mechanism. 

Shares have started to retreat as investors eye the end of the stamp duty holiday and reduced governmental scaffolding in the sector. Help to Buy has already been restricted to first-time buyers and will be phased out completely in 2023. 

Support schemes like these have been cash cows for the nation’s housebuilders over the past few years - a new idea might come in to replace them but it looks like investors are planning to cross that bridge when they get there. For now, the recent drivers for the whole sector look to have run their course.

For Persimmon in particular, it’s a question of how long the firm can maintain the positive momentum generated by high house prices and revenues recovering over the pandemic.

A hike in the cost of basic building materials has the potential to hurt the bottom line, especially if the builders can’t shift those costs onto willing home buyers.

That might turn out to be a short-term inflationary trend and investors will be keen to hear more about how the firm plans to tackle it in this week’s update.

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What are your thoughts on what's ahead for the stock market this week?

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