After a relatively quiet Monday, the corporate news flow is set to pick up on Tuesday, with several big names due up.
Rio Tinto PLC (LON:RIO) will be the first of three mining giants to put out a trading statement when it updates the market.
As with its peers, first-half iron ore production is expected to be lower given weather-related issues in Australia and other operational difficulties.
In a note last week Deutsche Bank suggested Rio was perhaps the best short-term investment in the sector as it “offers the most powerful cash return story in 2019” from elevated iron ore prices.
The number crunchers expect iron ore prices to peak in the current quarter, underpinned by strong demand for steel.
German economy key for Hays
Hays PLC (LON:HAS) is also set to shove out a fourth-quarter update, and shareholders will be hoping the ongoing slowdown in the German economy, its largest market, hasn’t dented prospects too much.
In its third quarter the company reported a 6% increase in its German like-for-like net fee income (NFI), a drop from second quarter growth of 16%, although as this was against tough comparatives from the prior year investors may be expecting an improvement.
Brexit will likely continue add a grain of uncertainty the firm’s UK arm, while the group may be looking for a turnaround in its New Zealand market, where NFI fell 8% last quarter.
Analysts will also be looking for more assurances to confirm their forecasts for the full year, which are currently predicting a pre-tax income of £245mln.
Experian’s growth to ease in first quarter
Experian PLC (LON:EXPN) is expected to report a slowdown in organic revenue growth for the first quarter after strong end to the 2019 financial year.
The credit score giant posted a 10% rise in fourth quarter organic revenue as more banks and businesses in North America hired the company. In the full year, organic revenue rose 9%.
Credit Suisse expects the company to report a 7% rise in organic revenue for the first quarter.
“We believe [this slowdown] creates a challenging environment for further re-rating.”
The longer-term outlook “remains positive” though, with strong underlying markets and a “raft of new market opportunities” supporting growth.
UK jobs data
Employment data for the three months to May will be released on Tuesday as well, which, along with other data later in the week, will help to paint a picture of the UK’s economic health as it gears up for Brexit.
In the three months to April, UK jobs growth eased amid the uncertainty over Brexit.
The Office for National Statistics said employment rose by 32,000 to 32.75mln in the period, marking the weakest rise since August and significantly lower than the 99,000 jobs added in March.
However, the jobless rate held at 3.8% – the lowest since the mid-1970s – and annual growth in average weekly wages accelerated to 3.4% from 3.3% in March.
Significant events expected on Tuesday July 16:
Trading update: Rio Tinto PLC (LON:RIO), Burberry PLC (LON:BRBY), Experian PLC (LON:EXPN); Hays PLC (LON:HAS)
Finals: Gately Holdings PLC (LON:GTLY)
AGMs: APQ Global PLC (LON:APQ)
Economic data: UK labour market data; US retail sales; US import/export prices; US manufacturing, industrial production