Major UK Earnings This Week

The FTSE 100 has started the week in positive territory and is on track for a new record high. This comes after UK unemployment unexpectedly rose to 5.0%, the highest level since the pandemic, and bolsters bets of a BOE rate cut next month. Traders now look forward to several notable firms updating investors this week, which could shake up the trajectory of the UK's premier stock index.

UK Earnings to Watch This Week

• BAE Systems (BA)
• Experian (EXPN)
• Flutter (FLTR)
• Burberry (BRBY)
• 3i (III)
• Kier (KIE)
• Persimmon (PSN)
• Rolls-Royce (RR)
• Wizz Air (WIZZ)

UK investors and traders alike may focus on the following three major earnings this week:

BAE Systems Losing Momentum

The defence firm had seen its share price rise by over 60% in the early part of the year, amid NATO and, particularly, European plans to significantly increase defence spending. However, the enthusiasm has since waned, and the share price has declined throughout October and November. Traders will be looking to the company's Q3 trading update on Wednesday to see if there are signs that the order uptake is increasing. Recently, theUS announced plans to buy 1 million drones to address the changing dynamics of the battlefield in light of experiences in the war in Ukraine.

Rolls-Royce Keeps Flying

The other defence company to report on is Rolls-Royce, although it has mainly gained traction as a result of its aerospace division. The consensus among analysts is that the company will report Q3 sales of £10.6 billion, a 9.2% increase from the prior year. EPS is expected to be at 12.9p, representing a 14.6% gain. The companyraised its full-year guidance with its interim results and hopes to have £3.0-3.1 billion in cash flow. The company's remarkable turnaround has fuelled its share price gain. Still, eventually it will be completed, with traders likely focused on signs that the measures are starting to have diminishing returns. For this reason, there is an increasing focus on the company's shareholder returns, following the reinstatement of dividends this year and the announcement of a buyback, as investors focus on the company's profitability.

Persimmon Increasing Completions

The home builder space in the UK could be revisited now that expectations are rising that the BOE will resume its rate-cutting cycle. There have been mixed reports from the industry, with construction PMI falling while new home prices, according to Halifax, unexpectedly increased in October. Persimmon stands out for managing to increase completions in the first half of the year, withaverage sales prices rising 8%, well above the average market rate. Traders will be looking to Thursday's trading update for signs that the trend can continue through the winter.

FTSE 100 Continues to Hit Record Highs

The UK’s premier index has been reaching consecutive record highs this week, leaving behind 9800 and 9580 as short-term supports, with the next level sitting at 9360. A continuation to higher levels exposes the 10k handle, with the measured-move projection of the V-shaped recovery suggesting an extension to 10250. However, the RSI is struggling to gain momentum and is currently in an overbought region, which suggests that a momentum reset could be in play.

Source: SpreadEx | UK 100, daily