The corporate reporting schedule for the coming week is mostly unclear due to the FCA moratorium on results, however, some firms will still be keeping to the diary with updates and others due to report results may issue their own headline figures to keep investors abreast of their top-level performance.
On the macro front, investors will be bracing for the US non-farm payroll data, although there will also be some data from this side of the Atlantic with the UK’s PMI readings.
Non-farms arrive in shadow of coronavirus
After the shockingly big weekly jobless claims numbers in the past week, the coming Friday’s US non-farm payrolls report will broaden the picture.
The previous NFP report, which showed 273,000 new jobs created in February and took the unemployment rate down to a 51-year low of 3.5%.
Coronavirus has since taken a toll on the economy, with the latest weekly jobless claims hitting a record 3.2mln and a SurveyUSA poll suggesting 14mln jobs have been cut, with 40mln workers having had their hours cut.
The timing of the official Bureau of Labor Statistics figures for March will mean we need to wait another month for a better picture, economists said.
Some, such as Capital Economics, believe Friday’s jobs report is “more or less irrelevant at this stage because we already know that millions of workers have been laid off since the survey was conducted earlier this month”.
There is certainly expected to be a negative number, with the unemployment rate likely to jump.
Falling employment and the volatile stock market is certain to fatten consumer confidence and business surveys, said ING Economics, reinforcing the belief that the US is already in a deep recession.
“The fiscal and monetary stimulus is huge, but it is about damage limitation more than anything,” ING said.
“The US can only grow once the economy re-opens. In this regard, we will be closely following President Trump’s press conferences as to how hard he is leaning in the direction of tentative easing of restrictions, despite the ongoing healthcare crisis.”
New round of UK PMIs
Wednesday brings a new month, and for followers of economic data, April Fools Day will bring the start of a new round of IHS Markit PMI surveys.
While these indices were pretty solid for February, the ‘flash’ readings indicated the services PMI will drop from 53.2 to 35.7, while the preliminary score for the manufacturing PMI fell from 51.7 to 48.0.
A score below 50 indicates a contraction in growth is on the way.
Manufacturing is due out on 1 April, the construction survey on the Thursday and the key services PMI is due out on Friday.
After the ‘flash’ reading of the UK composite PMI fell from 53.0 in February to 37.1 in March, below its low-point in the 2008/09 recession after a fall that was more than three times bigger than its previous record, economist Samuel Tombs at Pantheon Macroeconomics said this colossal drop “signals clearly that the economy is hurtling towards a deep recession”.
There will also be PMI surveys from around the world, with the most eye-catching number being the 4.4 (yes four point four) )consensus forecasts for China’s manufacturing sector in March from 35.7 in February.
Pennon looks to stay level
Pennon Group PLC (LON:PNN) is one of only a few firms to have delivered major news recently that is unrelated to the coronavirus pandemic, having last week announced the sale of its Viridor waste business for £3.7bn.
The water firm said that the proceeds of the sale will be used to pay down debt and returned to shareholders, although with companies suspending dividends all across the market investors will be looking to see if Pennon will follow the trend or buck it in its update on Monday.
With Jefferies currently having Pennon in its ‘at risk’ dividend category, they may be disappointed.
The company’s income is mostly sheltered from the volatility due to the fact that people are still likely to use utilities during the outbreak.
With demand unlikely to dry up (in fact it could potentially increase due to people staying indoors during the lockdown period), and the waste business on the way out, the performance of the water business will hold sole attention. Overall, the company will be hoping to maintain a ‘steady as she goes’ approach amid the turmoil of the wider market.
Is Smiths Medical still demerging?
The engineer predicted the current financial year would be more weighted in the first half, ending in January, which may come in handy considering the coronavirus pandemic hitting markets from February onwards.
The FTSE 100-listed group should also update investors on the demerger of Smiths Medical, expected to be completed by June.
Chesnara outlook eyed
The latest acquisition by the company was November’s purchase of life products and savings plans from the Netherlands operation of Belgian-owned Argenta Bank-en Verzekeringsgroep for £25mln.
The deal, which will be immediately earnings enhancing, was for a closed book of business consisting of 44,000 policies, adding to Scildon, a Dutch open life and pensions business previous acquired from Legal & General.
“Life companies have not been immune to this market rout given that fee income is often dependent on the value of assets under management which no doubt has taken a hit in recent weeks,” said analysts from the Share Centre, noting that the stock is admired for its high dividend yield.
Results for 2019 will not have been affected by the coronavirus, but management’s outlook will be keenly scrutinised by investors.
“Investors will expect a progress report on the integration of recent acquisitions and it solvency ratio which last stood at 155%,” the analysts said.
The Saga is not ending
Saga PLC (LON:SAGA) is expected to announce a series of cost-saving measures in its finals, out on Thursday.
The firm, which specialises in products and services for people aged 50 and over, is set to get a hard coronavirus hit considering its focus in the travel sector.
Analysts at Peel Hunt expect Saga to announce further divestments, though last month it delayed the sale of its tour operator arm due to market volatility, to support the cruise business going forward.
Wizz Air updates from ground control
One firm sticking to its release calendar is carrier Wizz Air Holdings PLC (LON:WIZZ), which like the rest of the airline sector is struggling not to buckle as the pandemic puts the travel industry under an effective hiatus due to border closures and movement restrictions.
The budget carrier is due to deliver a trading update on Wednesday, just over a week after it said 85% of its fleet had been grounded.
The group also said keeping its entire fleet out of the skies was a “distinct possibility”, so investors will be eyeing whether the firm has taken the final step and stopped all flights as a result of the outbreak.
With the industry effectively on pause until the pandemic subsides, shareholders will be looking to see how the company has taken any steps to bolster its balance sheet and how fast it is burning through cash.
Any updates on whether the firm has applied for government assistance to help it cope with the stoppage are also likely to be welcomed by investors.
Significant announcements that had been expected for week ending 3 April:
Monday 30 March:
Tuesday 31 March:
Finals: Animalcare Group PLC (LON:ANCR), Henry Boot PLC (LON:BOOT), Luceco PLC (LON:LUCE), Michelmersh Brick Holdings Plc (ON:MBH), One Media IP Group PLC (LON:OMIP), The Property Franchise Group PLC (LON:TPFG), Proteome Sciences PLC (LON:PRM), Quixant PLC (LON:QXT), TP Group PLC (LON:TPG), Tremor International Ltd (LON:TRMR), Yu Group PLC (LON:YU.)
Economic data: UK consumer confidence, UK GDP, US Chicago PMI, US CPI
Wednesday 1 April:
Finals: Futura Medical PLC (LON:FUM), Brave Bison Group PLC (LON:BBSN), Cathay International Holdings Ltd (LON:CTI), RHI Magnesita NV (LON:RHIM), Sumo Group PLC (LON:SUMO), The Mission Group PLC (LON:TMG)
Economic data: UK manufacturing PMI, US manufacturing PMI,
Thursday 2 April:
FTSE 100 ex-dividends to knock 3.9 points off the index: Smith & Nephew PLC (LON:SN.), Mondi PLC (LON:MNDI), Melrose Industries PLC (LON:MRO), Phoenix Group Holdings PLC (LON:PHNX), Standard Life Aberdeen PLC (LON:SLA),
Economic data: UK construction PMI, US jobless claims
Friday 3 April:
Economic data: US non-farm payrolls, US unemployment, US services PMI, UK services PMI