G20 foreign ministers meeting, Twitter political ad ban, Royal Mail results
The FT's Claer Barrett previews some of the big stories the FT is watching this week, including a meeting of G20 foreign ministers, Twitter's ban on political advertising, Royal Mail's first-half results and latest US earnings reports
Written by Simon Greaves, James Sandy, Nikou Asgari and Alistair Gray. Filmed by Rod Fitzgerald. Edited by Petros Gioumpasis. Produced by James Sandy
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Here are just some of the stories we'll be watching this week. Japan will host a meeting of G20 foreign ministers. Twitter's global ban on political advertising will come into effect. We'll have half-year results from the Royal Mail and the latest earnings reports from the US. First up, foreign ministers from the G20 will meet in Japan on Friday.
The meeting comes at a time of growing tensions in the Middle East, concerns over global trade, and continued unrest in Hong Kong. All eyes will be on Japan and South Korea as an intelligence sharing agreement between the two countries is due to expire this week. Seoul decided not to renew the deal after Tokyo imposed export controls on South Korea. Washington sees it as vital to combined efforts in tackling North Korea's nuclear and missile threats.
Meetings of the G20 foreign ministers, as opposed to heads of state, are a recent innovation. And the formal agenda on trade and the sustainable development goals is unlikely to produce dramatic results. More important is the chance of bilateral meetings especially between countries which find it hard to talk to the other.
For example, Japan and South Korea are likely to discuss their dispute over wartime forced labour with an intelligence sharing agreement between the two countries due to expire within days. The US and China will be able to further discussions over trade, while the rest of the world will have to decide just how much pressure it is willing to apply to Beijing over Hong Kong,
Twitter's global ban on political advertising comes into effect on Friday. It will apply to all electioneering adverts and ads related to political issues. The ban, announced by chief executive Jack Dorsey, will also encompass paid tweets from party candidates. The micro-blogging site is currently used by political parties and journalists to break news and fuel debates. But with party manifestos due out any day now in the UK, next month's British election will be one of the first major tests of the company's new policy.
The decision appears very much to be a direct jab at larger rival Facebook, which just weeks before made the highly contentious decision to allow all advertising paid for by politicians on its platform, even if it was misleading or contained misinformation. Twitter's decision is unlikely to impact its earnings, according to analysts, as its political advertising only accounts for a small slice of the overall advertising pot that it receives each year. For example, Twitter said that it made $3m from the US 2018 mid-terms. That compares to an overall revenue that year of $3bn.
Now, to the UK, where Royal Mail will post results for the first half of the year on Thursday. Despite being over 500 years old, the company is facing questions about its future. Last week, Royal Mail won a legal battle to temporarily prevent its workers from striking. This comes as the postal service approaches its busiest time of year.
It's the second time in as many years that Royal Mail has gone to court against the Communication Workers Union. The company is pressing ahead with transformation plans that will automate more of its services. While discontent among employees remains, investors will be hoping productivity gains can drive up share price performance.
Royal Mail results come amid an ongoing dispute with its postal workers and the Communication Workers Union, who are arguing for more pay and better working hours, among a whole range of other issues. Meanwhile, the company is looking to transform and push into the parcels business, while still beating other parcel delivery companies, including DPD and Hermes. By pinning its hopes on transforming into a parcel business, Royal Mail is right at the centre of questions about the future of the company.
As it looks to increase automation, cut costs, and improve efficiency, questions about job cuts are lingering over its head. Investors meanwhile will be looking at the share price. Royal Mail's share price has fallen by almost a fifth so far this year, and the company cut dividends earlier in May in order to fund some of these investments.
And finally, Wall Street will be watching a batch of earnings reports from some of the biggest retailers in the United States next week. Target, Macy's, and Home Depot will all post results just a few days before Black Friday. These should give an indication of how company executives are forecasting the forthcoming holiday season. And analysts are expecting a mixed bag of results. Like for like sales at big box retailer Target are forecast to be up around 3.6 per cent, but analysts expect weak performances at several other names including Macy's. Other companies reporting numbers include Victoria's Secret owner, L Brands, and department store chain, Kohl's.
The American consumer has been a big source of strength for the world economy. And that's helped the US retail set. So despite the relentless rise of Amazon, some companies are putting in perfectly respectable performances. Others really are struggling. It's no surprise that mall-based and department store chains' numbers this week are likely to be weak. The question is just how weak. And even for companies like Target, whose sales are holding up well, there is a lot of scrutiny on Wall Street of the bottom line with initiatives such as free shipping and the wider costs of adapting to e-commerce weighing on profit margins.
And that's what the week ahead looks like from the Financial Times in London.