BT is facing intensifying competition and regulatory pressures and at the first-half stage the company trimmed its estimates for full-year sales.

AJ Bell analysts say that “at least this means expectations are low as Allison Kirkby becomes the latest BT boss to try and negotiate the many cross-currents that face the company”.

This is probably no bad thing, say Bell’s researchers in a note, as BT is finding it hard to generate much by way of growth overall.

BT has had to backtrack on its prior forecast of growth in sales for the full year to March 2025. Management now expects a drop of 1% to 2%.

Watch out for updates on the £3 billion cost-cutting programme, the rapidly shrinking pension deficit and progress at the merged BT Sport-Discovery Eurosport business.

The company last week reported that half of Scottish homes and businesses can now get connected to ultrafast, reliable broadband following Openreach investment in the new digital network.

It has spent more than £435 million on full fibre links for Scotland so far, with 1.45 million properties now able to upgrade and take-up at 38% ahead of the UK average.

Katie Milligan, Openreach chief commercial officer and chair of its Scotland board, said: “Fast, reliable connectivity is a game-changer in every part of Scotland. It fuels economic growth and can support the redistribution of economic activity to less populated areas.

“This is quite simply one of the most significant infrastructure upgrades Scotland will see this century. We’re paving the way to future job creation, remote work, digital learning, and innovative healthcare access.”

Last September Deutsche Bank increased its price target in AG Barr, the maker of Irn-Bru and Tizer, on the back of a positive set of half-year figures. The bank attributed its upgrade to operational improvements and progress in boosting profit margins. 

The company issues a trading statement on Tuesday and investors will be keen to hear if chief executive Euan Sutherland has kept it on track for a strong second half.

WH Smith will update on trading on Wednesday and before that is expected to confirm that it is in talks with a buyer for its high street business.

Shell issues year-end figures as oil producers come under pressure from comments by US president Donald Trump on lowering prices.

Merger rumours have been swirling around Switzerland-based miner Glencore which is due to release its year-end production report.

Magnificent Seven ride again

Corporate news steps up a few gears this week with five of the so-called ‘Magnificent Seven’ due to report quarterly figures.

Microsoft, Meta and Tesla will release their numbers on Wednesday, followed by Apple and Amazon on Thursday. Google’s parent Alphabet is due on 4 February, and Nvidia, which has a January quarter-end rather than December, will report on 26 February.

AJ Bell analysts note that this septet “continues to fire investors’ imagination”. Over the past 12 months their aggregate stock market capitalisation has surged by nearly 50% to $17.7 trillion.

“Where these companies’ shares go matters to not just shareholders but investors across the wider stock market, especially if they hold passive tracker funds,” says AJ Bell in a note.

“These seven firms represent more than a third of the S&P 500’s stock market valuation and one fifth of that of the FTSE All-World index.

Interest rates

In early autumn, bond markets were anticipating four, one-quarter point rate cuts from the US Federal Reserve in 2025. According to the CME Fedwatch service, the most likely outcome is now seen as just one reduction, to 4.25% from 4.50%, by the end of the year, with a chance of a second.

May, the third meeting of the Federal Open Markets Committee this year, is seen as the best prospect for the first (and potentially only) reduction and markets are currently putting a near-zero probability on any change at this coming meeting.

Analysts are asking whether President Trump will pressure Fed chairman Jerome Powell for cheaper money, just one further variable for investors and economists to consider.

Meanwhile, markets expect European Central Bank President Christine Lagarde and her colleagues on the Governing Council to cut the headline rate by a quarter point to 2.9%.

The minutes of last December’s policy meeting in Frankfurt asserted that inflation could return to its 2% target by the middle of 2025, while economic growth has remained weak, especially in Germany and France.

The prospect of lower interest rates, even as the ECB continues to shrink its balance sheet, is one reason why both the Stoxx Europe 600 and Germany’s DAX equity indices stand at all-time highs, despite the prevailing gloom over the economic and political outlook in Europe’s largest economy in particular.

DIARY

Monday 27 January

• Trading statement from Dr Martens

Tuesday 28 January

• Full-year results from Idox and SThree
• Trading statements from  AG Barr, Computacenter, Harworth and Pets at Home.

Wednesday 29 January

• Trading statement from WH Smith
• Nationwide UK house price index
• Bank of Canada interest rate decision
• In the US, quarterly results from Microsoft, Meta Platforms, Tesla
• Rachel Reeves, Chancellor, delivers speech on economic growth

Thursday 30 January

• Full-year results from Shell
• Trading statements from BT, Glencore and St James’s Place
• UK mortgage approvals
• EU unemployment
• In the US, quarterly results from Amazon, Visa, Mastercard, Caterpillar, Comcast

Friday 31 January

• German inflation
• In the US, quarterly results from ExxonMobil, Chevron, ConocoPhillips