Bellway PLC's (LON:BWY) trading statement today will give some clues on how Britain’s economic future will pan out after the UK election result.
In March, the group reported robust numbers for the half year to end January, in which it reported record completions for the half and that ongoing customer demand was strong, and the market will want to see if momentum has continued.
Pre -tax profits were up 9.3% to £247mln in the last half year, on revenues, which were 5.9% higher at £1.14bn.
Broker Liberum noted that increased uncertainty following the UK vote would be expected to slow house purchases and make the sector less appealing. This was borne out on Friday, when shares in the builders dropped.
But analyst Charlie Campbell added the sector still has strong underpinnings, and government policy was now likely to move away from austerity towards fiscal expansion.
That would favour house builders who can lift volumes and those involved in social housing, said the broker. Commentators’ belief that the interest rate hike will now be pushed back until 2020 is also likely to provide support to the sector, in terms of mortgage lending.
Liberum, for example, sees relative underperformance from the large returners, like Barratt Developments (LON:BDEV), which it rates ' sell' but relative outperformance from 'smaller growers', like Bellway (LON:BWY).
Fed expected to hike interest rates
There’s also plenty of data for the market to get stuck into both at home and abroad.
UK jobs data is due out this morning which, among other things, is expected to add more weight to the argument that wages are stagnating.
Miners and mining investors will be keeping a close eye on the Chinese industrial production figures. As the biggest consumer of commodities, the state of China’s industrial sector is key for natural resources companies.
Over in the US, retail sales data is due out later on this afternoon, but the big focus will be on the Federal Open Market Committee.
The Fed’s decision on whether to hike interest rates once again this year is due this evening, with the markets widely expecting a 25 basis point increase to 1.25%.
Elsewhere on Wednesday
Interim: Elegant Hotels Group Plc (LON:EHG)
Finals: Charles Stanley Group PLC (LON:CAY);Biffa PLC(LON:BIFF); Severfield (LON:SFR); Norcros PLC (LON:NXR); Castings PLC (LON:CGS); Enteq Upstream (LON:NTQ)
Trading Statement: Bellway PLC (LON:BWY); The Gym Group Plc (LON:GYM)