It’s finally starting! The Jackson Hole symposium, the meeting of central bankers.
This is about as sexy as it gets in the world of central banking, which is to say not very sexy at all, especially as it is largely a virtual event now.
Some people seem enthused by the prospect, however. It is one of the most eagerly anticipated events on the macroeconomic calendar, says Fawad Razaqzada, market analyst at ThinkMarkets, and "could provide some volatility in the markets as the Fed is seen spilling the beans on tapering timeline".
Others are less smitten.
"Some investors will view [Jackson Hole] as nothing more than a sounding post for prolix windbags who seem to think that centrally planning economies is a good idea – despite there being plentiful evidence to the contrary," said analysts at AJ Bell.
Prolix Windbags happens to be my favourite prog-rock album of all time.
"Others will hang on every word, in the belief that central banks’ policies are the key tool available when it comes to keeping the global economic show on the road – and financial markets too, for that matter – even once the pandemic is beaten back," the commendably cynical pundits at AJ Bell said.
John Vail, the chief global strategist at Nikko, one of Asia's largest asset managers, is obliged to at least feign interest.
“The Fed has successfully prevented a taper tantrum, with the market now greatly expecting a taper starting this year without the ‘tantrum’. No one is expecting much new information during the conference, compared to what has been recently said by Powell and other officials, including the minutes of the last FOMC meeting released last week,” Vail said.
That’s far too much verbiage spent on a largely meaningless talking shop – did someone say “prolix windbag”? - let’s get on to company results expected on Thursday.
Half-year numbers from CRH PLC (LSE:CRH) will provide an insight into the US economy, as the Irish-headquartered building materials group derives more than half of its business there.
Back in April, the FTSE 100 group said first-half underlying profits would be “well ahead” of the previous year, as demand generally is returning and prices are rising.
First-quarter like-for-like sales increased 3% year-on-year as a strong performance in building products was partly offset by weather disruption in materials businesses in North America and Europe.
Management, who have shelled out $200m so far on acquisitions in 2021, said they anticipated “further normalisation in our markets in the second half of the year as the health situation continues to improve”.
“The first half tends to be slower than the second at CRH, so guidance for the current trading period and beyond is also of keen interest,” said analyst Nicholas Hyett at Hargreaves Lansdown.
With the US$1trn infrastructure spending bill agreed in Washington, investors will want to hear what sort of tailwind is expected for future sales.
Also on Thursday, final results from recruiter Hays PLC (LSE:HAS) should prove a wider global indicator, as it reports its business in four regions: the UK & Ireland, Germany, Australia & New Zealand, and the rest of the world.
Recruitment companies tend to follow the ups and downs of the wider economy, so results are useful even for those who don’t invest.
The FTSE 250 group reported a 39% increase in net fees in the fourth quarter as it rides the tailwind of the global recovery – though there are plenty of lumps and bumps in most regions.
“The particularly strong growth in permanent employment placements bodes well for the strength of the recovery,” says Hyett.
He says investor attention will be firmly on the cost line, where the group took steps to cut costs by 13% during the pandemic.
“Traditionally recruitment is a bit of a body shop. Winning new contracts requires hiring and training new recruiters, and consultants are paid in commission, which makes delivering improvements in margin difficult as a result.”
Significant announcements expected
Interims: CRH PLC (LSE:CRH), Faron Pharmaceuticals Oy (AIM:FARN, OTC:FPHAF), Hunting PLC (LSE:HTG), Chesnara PLC (LSE:CSN, FRA:6DE)
FTSE 100 ex-dividends to knock 5.78 points off the index: Auto Trader Group PLC (LSE:AUTO), Land Securities Group PLC (LSE:LAND), St. James's Place PLC, Diageo PLC (LSE:DGE), Mondi PLC (LSE:MNDI), Aviva PLC (LSE:AV.)
Economic data: US initial jobless claims, US GDP growth rate, UK car production