The Week Ahead: Health check for American economy

It's going to be quiet in the UK market this week, but there will be plenty of action across the Atlantic as the US reporting season gets under way. A number of blue chip companies will be announcing their second-quarter results, including tech leaders Microsoft and IBM, banking giants Citigroup and Bank One, soft drinks maker Coca-Cola and auto companies Ford and General Motors. This will give a good snapshot of the health of the US economy, and the expectation is that this will be a curate's egg - good in parts.

In Europe, it is a case of checking the numbers, as both Nokia and Ericsson are putting calls into the market. Nokia, the world's largest producer of mobile phones, reports on Thursday. "We expect ... new product launches, continued market share gains and a wildcard boost from the N-Gage gaming device [mobile interactive console]," says a research note from Deutsche Bank. Nokia's rival, Ericsson, raised £2.5bn from shareholders last September but there are fears it might need more.

Northern Rock, the mortgage lender, announces results for the first six months of the year on Thursday. Investors will be keeping a close eye on how the company is coping with a slowing housing market. Simon Maugham, head of European banks research at Dresdner Kleinwort Wasserstein, points out: "The revenue issue is key. What will they say about the pipeline of new business? Can they deliver, as they have always promised, market share growth in a slowing market?"

Misys, a software provider for the banking industry and the owner of the UK's largest network of independent financial advisers, is also reporting results. The focus here will be on the outlook as well as any evidence of a recovery in both the technology sector and the financial markets.

Also standing out in a quiet week is a trading update from one of the UK's big high-street retailers, Marks & Spencer. "I would expect it to be strong on food and reasonable on clothing," said Nick Bubb of Evolution Beeson Gregory. Given Marks & Spencer's renewed strength in food, questions may be asked about its willingness to participate in the supermarket bidding wars.

The aerospace industry bellwethers, British Airways and BAA, hold their AGMs next week. BA will try to avoid saying anything dramatic. By contrast, BAA, which operates seven airports in the UK including Heathrow, has suffered the effects of both 11 September and Sars but announced passenger traffic numbers for June that were up 2.9 per cent on the previous year. "It looks as if there is a slow recovery coming through in terms of volume, driven by the discounting of prices from airlines," said Rebecca Langley of Dresdner Kleinwort Wasserstein. "But we are not expecting a rebound in profits any time soon."

Little news is expected from the property company Land Securities at its AGM. Similarly, British Land's annual meeting is expected to be a quiet affair, especially when compared to last year when Laxey Partners, a major shareholder, used the AGM as a stage to voice its disapproval of John Ritblat, chairman and chief executive of British Land. Laxey's stake is no longer substantial enough to be able to create a stir, but other shareholders may questionhow the company intends to create value.

Tim Waterstone, the entrepreneur who built the Waterstones chain of bookstores, will decide whether to trump a £59m offer for toy shop group Hamleys from Icelandic retailer Baugur. Mr Waterstone may throw in the towel.

The stock market might be quiet but one venue that will be bustling is Snaresbrook Crown Court, where the trial of Andrew Regan is due to start tomorrow. He is charged with the theft of £2.4m from his former food manufacturing company Hobson, an allegation he denies. The colourful entrepreneur once made an audacious bid for the Co-operative Wholesale Society and the events of the trial are bound to be anticipated with some fascination.

It is a busy week for economic figures in the UK, with the highlight being the inflation figures released on Tuesday. "The inflation numbers are going to be key to the overall economic picture," said David Page, economist at Investec Securities.

Alan Greenspan, chairman of the US Federal Reserve, addresses the House of Representatives on Tuesday and the Senate on Wednesday. These speeches may tackle the issue of deflation that has spooked the markets recently. "It may give us a clearer idea of where US monetary policy is going," said Mr Page.