What to expect from the week ahead
A quiet, shortened week on the corporate front, putting the spotlight on a number of key data releases in the US as well as several bank earnings reports from across the pond
With markets having remained closed on Monday in celebration of Easter, investors are likely to see a sluggish start to the week as the nation returns to work following the four day weekend. The FTSE 100 index is expected to get off to a mildly negative start on Tuesday, taking its lead from falls on both the US and Asian markets on Monday.
Wall Street was under pressure following a profit warning from Boeing, reports General Motors has been told to prepare for bankruptcy by the US Treasury, and sliding oil prices impacting energy stocks.
The International energy Agency on Monday cut its oil demand forecast, sending oil prices almost $2 lower to $50.45 per barrel at last check. If oil prices remain this low on Tuesday morning, the UK’s heavyweight oil players, such as Royal Dutch Shell, BP and BG Group, could find their shares prices under the cosh.
Sentiment surrounding the banking sector is also likely to be cautious at the beginning of the week as investors look to the US for signs of improvements in the financial sector as several key American banks report earnings results later in the week.
Here in the UK, only a handful of companies are scheduled to update the market on their progress so far this year, among them are a number of retailers and pubs groups, swinging the spotlight onto consumer confidence. Pubs operator Marston’s will report its latest trading update on Wednesday, while retailers Ideal Shopping Direct and Halfords will respectively unveil final results and a trading statement on Thursday.
With little else of note on the corporate news front, the focus lies with economic data releases, which will be closely eyed for any further signs that the current financial crisis could have bottomed out.
In the UK, the only data of real interest due for release is the RICS house price balance for March, out on Wednesday, which is expected to have slipped to 77% from 78% in the previous month, and Thursday’s BRC retail sales monitor.
Thus, all eyes will be focused firmly on a raft of figures due to emerge from the US this week. On Tuesday, the producer price index (PPI) is forecast to show no change month-on-month in March after the previous month’s 0.1% rise, although core PPI (excluding food and energy prices) is expected to have risen 0.1% last month after February’s 0.8% increase. Retail sales for March and business inventories for February are both due out on Tuesday—the former is seen up 0.3% while the latter is expected to have fallen 0.9% month-on-month.
Wednesday key US data releases are set to include: consumer price index (CPI) figures for March, seen up 0.2% or 0.1% excluding food and energy; the Empire State manufacturing survey, forecast to show a continued contraction but at a lesser pace—the survey is expected to come in at -35.00 in April against March’s -38.23; industrial production for March, seen falling 1.0% after February’s 1.4% slide; and the release of the Federal Reserve’s Beige Book.
On Thursday, in addition to the usual weekly jobless claims figure, the markets are also looking for housing starts to have decreased slightly to 543,000 in March following 583,000 starts in February but for building permits to have increased a touch to 549,000 last month from 547,000 in February. The Philadelphia Fed index is forecast to show a marginal improvement, albeit still to a negative figure of -32 in April after a -35 reading in March.
The US’s week of data announcements will end with one of its leading indicators: University of Michigan consumer confidence, which the consensus prediction is pointing to an improvement in April to 58.5 from 57.3 last month.
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