As is the way of late, despite the positive start last week, stocks ended up being a bit crap following US inflation data on Tuesday.
In addition, while the headline number showed UK inflation eased to 9.9%, it was primarily driven by fuel prices, with food and clothing actually rising. As a result, consumer discretionary spending will likely be stretched further. Here’s why we are watching JD Sports, Cineworld and Boohoo this week:
JD Sports (JD)
- JD Sports will report its Interim Results on Thursday, September 22.
- As mentioned, with inflation data showing the cost of apparel and footwear increasing, consumer demand for JD Sports is waning, and its website traffic is now at its lowest since 2017.
- While the company has a strong balance sheet, the current economic climate means we are wary ahead of its interim release, leaning slightly bearish.
- Cineworld is also said to report Interim Results on Thursday, September 22.
- The struggling cinema chain recently filed for Chapter 11 bankruptcy in the US.
- Its significant debt pile and slow recovery following the pandemic have significantly hit the company.
- While cinema demand is recovering, it is still below pre-pandemic levels.
- According to Short Tracker, Boohoo is the most shorted London stock.
- However, Citadel slightly upped its Boohoo stake last week.
- Even so, our Twitter data tracking shows mentions of Boohoo are down around 16% from the last quarter, while website traffic is around pre-pandemic levels after falling from its pandemic highs.
- With demand still waning and shares down 83% in the last 12 months, the question now is, how long will the share price decline continue?