What to watch
US markets are closed on Monday for a public holiday.
JD Sports Fashion: Tomorrow, London-listed JD Sports Fashion will release its latest quarterly earnings. The firm is ahead of the broader market year-to-date, although its share price is still down 14.6%. Back in April the company scrapped its final dividend and chairman Peter Cowgill took a voluntary 75% salary cut in response to the Covid-19 pandemic. Investors will be watching for the company’s view on whether the pandemic-induced shift to online shopping will be a permanent one, and how it plans to capitalise. Of interest too will be how the firm’s bricks and mortar stores have performed as lockdown restrictions have been relaxed.
Ashtead Group: British industrial equipment rental firm Ashtead Group has gained 6.1% year-to-date, although it has been largely flat over the past three months. The firm’s growth in recent years has been driven by acquisitions, and potential opportunistic deal-making during the current turmoil will be a likely feature of tomorrow’s earnings call. Last quarter, CEO Brendan Horgan noted that the firm had continued with new location openings, bolt-on M&A, and dividend/buyback returns to shareholders during the crisis, while remaining within its long-term leverage range of 1.5 to 2 times.
September is historically the worst month for stocks
The month of September has a widespread reputation for poor equity market performance. According to MarketWatch, since the Dow was launched in the 19th century, it has sustained an average 1% fall during the month versus the 0.7% gain average for all other months. Financial advice firm LPL’s chief market strategist Ryan Detrick told Business Insider that the last two times when stocks were up more than 5% in August (1986 and 2000) the S&P 500 fell by 8.5% and 5.4% in the September that followed. That said, on average the Dow has not lost money during the September of presidential election years.
This year there are a number of issues that will come to a head during September. As well as election fever, a key event this month will be the Federal Reserve’s September 16 meeting to discuss further steps to support the economy during the pandemic. Sam Stovall, chief investment strategist at CFRA, noted in a Reuters interview that a breakdown in stimulus bill negotiations between Democrats and the White House may add to volatility during the month.
Crypto corner: Bitcoin bank float gets billionaire backing
A bitcoin banking company is planning to raise up to £40m by floating on the London Stock Exchange.
Mode, which provides online payments services and lets users buy and sell bitcoin, is backed by multimillionaire businessman Jonathan Rowland and has also received investment from Biz Stone, the co-founder of Twitter.
The company is expected to confirm a stock market listing in the next month according to reports.
Mode, which bills itself as a “trusted place to buy and store bitcoin, offers a “Bitcoin jar” where users can buy cryptocurrency that then offers them an interest rate return.
