Key this week will be a number of full-year results releases from the insurance sector that will help determine whether the sector continues its recent rebound or if it falls back into the grip of the bears, and a flurry of macroeconomic data that will come peak on Wednesday when the US Federal Reserve announces its latest rate decision and the UK’s Bank of England releases the minutes from its last rate-setting meeting.
Sticking with the macroeconomic calendar, two separate house price measures for the UK will be eyed at the beginning of the week, with Rightmove’s survey out in the early hours of Monday morning and the DCLG survey out the following morning. Housing data is also due from the US, which will report housing start for February on Tuesday—expected to have slipped to 450,000 from the previous month’s 466,000 reading.
Following Monday’s US Empire State manufacturing survey, which is forecast to reveal a slight deterioration in March, Tuesday’s producer price index (PPI) and Wednesday’s consumer price index (CPI) figures, the US Fed’s interest rate decision will be of utmost interest to investors worldwide—not so much for the interest rate, which is widely expected to remain the same, but for any indications on the government’s plans for quantitative easing measures. This is scheduled for the same day that the Bank of England will release the minutes to its most recent Monetary Policy Committee meeting when UK rates were cut to a new record low of 0.5% and the first stage of the British government’s quantitative easing programme was unveiled.
Other economic announcements of interest include Wednesday’s current account deficit from the US, which is estimated to have narrowed marginally to US$136.7 billion in the fourth quarter of 2008 from the previous quarter’s US$136.9 billion figure; UK unemployment figures (also on Wednesday) that are forecast to show a rise in both the ILO measure, to 6.5% in January from 6.3% in December, and the claimant count rate, to 4.0% in February from 3.8% the month before.
The focus on Thursday—the final day of the week for economic indicators in light of Friday’s lack of any meaningful data—will be on the US’s jobless claims for the week ending March 14, the Philly Fed survey (expected to have slipped to a reading of 40.0 for March from 41.3 previously) and the nation’s leading indicators, seen declining to -0.6% last month from +0.4% in January. So, all in all, it’s a busy week for economic observers, but unfortunately with very little in the way of good news expected.
Turning to the corporate calendar, after the insurance sector’s hammering of late, investors will be keen to see if the industry can sustain its rally of the latter part of last week when sentiment in financials in general seemed to be improving amid hopes it could have found its floor at last. On Tuesday, Friends Provident’s final results for 2008 will be eyed for any new developments since the group’s preliminary numbers in January: EPS is seen rising to 13.4p from 12.7p in 2007. And Thursday’s final figures from Prudential, which were also largely pre-announced, will be watched for further information and, hopefully, reassurance on write-downs and unrealised losses from the last quarter of the year.
For the banks, which also staged something of a recovery towards the end of last week, industry experts will be looking across the pond to the US for signs that the sector’s desperate performance over the last year could be coming to an end. Goldman Sachs will report results ahead of the US open on Tuesday, while Morgan Stanley will do the same on Thursday. Also on Thursday, HSBC will host its extraordinary general meeting.
Elsewhere, Royal Dutch Shell’s strategy presentation will provide the focal point of the week for the UK oil & gas industry on Wednesday and the following day’s preliminary results from JKX Oil & Gas will also be of interest.
Friday is scheduled to be a quiet day, providing investors with a well-earned break from economic data and earnings results and a chance to consolidate the week’s events. Only a handful of UK companies will report results on the final session of the week, with Carnival’s first quarter and John Lewis’s weekly sales figures among them.
