Wednesday will see insurers and housebuilders in focus with half-year results due from both Legal & General Group PLC (LSE:LGEN) and Taylor Wimpey (LSE:TW.).PLC (LSE:TW).
Meanwhile, investors will be keeping an eye on the macro diary for more PMIs from the UK and US as well as the latest American ADP jobs figures ahead of Friday’s non-farm payrolls.
L&G should be more optimistic
Half-year results from Legal & General on Wednesday should be supported by macroeconomic advances in recent months.
We last heard from the life insurer back in March when it said it had set aside another £110mln for possible early deaths due to the new strains of COVID-19, expecting pandemic-related claims to rise in 2021.
In 2020 operating profits were reduced by £228mln due to the pandemic, including £76mln for COVID-19- related claims.
While excess deaths are moderating, investors should not expect this to be a focal point at the half-year results, analysts at Barclays said, as mortality and longevity assumption changes are typically made at year-end.
Retail sales volumes in the life insurance market should show a “modest but continued recovery”, the analysts added, while bulk annuities “had a pedestrian start to the year, but those are typically skewed towards the second half”.
Investment margins for the LGIM arm, which in the last year or so seems to have become one of the most powerful industry voices on ESG matters, should be supported by “favourable market trends”, while solvency ratios should be supported by higher rates and stronger equity markets.
Taylor Wimpey (LSE:TW.) on solid foundations
Housebuilder Taylor Wimpey’s half-year results on Wednesday could be facing some nice comparatives given house purchases ground to a halt last year during the first set of UK lockdowns.
With this in mind, investors are likely going to look to 2019 for a more accurate comparison of how the business is doing, although given the firm has continued to maintain its full-year guidance, few surprises will be expected.
As a result, comments on demand levels are likely to be a key focus as well as the order book when read against the current state of UK house prices.
Significant announcements for Wednesday August 4:
Trading announcements: UDG Healthcare (LSE:UDG) (LSE:UDG) PLC
Interims: Legal & General Group PLC (LSE:LGEN), Taylor Wimpey PLC, Ibstock PLC (LSE:IBST) (LSE:IBST), Morgan Sindall Group PLC (LSE:MGNS) (LSE:MGNS), Ferrexpo PLC (LSE:FXPO) (LSE:FXPO)
Economic data: UK services PMI, US ADP jobs, US services PMI