Friday preview: 'Fiscal bazookas', Berkeley Group in focus

updated: 12 March 2020 at 4:10pm Author: Alexander Bueso

(Sharecast News) - The focus at the end of the week will be on financial markets themselves and any headlines around expected policy measures on both sides of the Atlantic.
After the market close on Thursday, reports indicated that the European Commission would unveil the details of its fiscal stimulus plans the next day.

Some economists believed that they would deliver, but based on past precedent, there remained ample room for disappointment.

Across the pond meanwhile, even with under five days to go until the US Federal Reserve's next regularly-scheduled policy announcement, on 18 March, there are some analysts who believe that the central bank might yet be forced into another emergency interest rate cut.

However, with the Federal Reserve Bank of New York having announced the start of broader debt purchases for a month on Thursday, alongside $1.5trn in short-term liquidity injections, that probaility may now be lower.

Indeed, for Ian Shepherdson at Pantheon Macroeconomics, although the NY Fed had only committed to extend its $60bn of daily purchases to across a range of maturities for a month, he expected that the Fed would extend that indefinitely on 18 March, together with an at least 50 basis point interest rate cut, and with Congress set to follow with its own "fiscal bazooka".

"The bigger and quicker the better."

Against that backdrop, investors will also be keeping an eye out for the University of Michigan's preliminary reading for US consumer confidence in March (consensus: 96.4), with special attention on whether the coronavirus was yet having much of an impact on consumer spirits or not.

To take note of, the S&P 500 had already moved dangerously beneath its key level of technical support, the 200-week moving average, with further drops a potentially significant threat to economy in and of themselves.



Berkeley Group Holdings is among the companies due to update financial markets at the end of the week.

UBS's Gregor Kuglitsch is expecting the luxury homebuilder to post full-year profits before tax of approximately ?557m, alongside ?595m of net cash on hand net of the already announced ?500m capital return.

The analyst said that the coronavirus might have already had a negative short-term impact on foreign demand, but at this stage he expected the company to stand by its medium-term guidance.

Indeed, in a research note sent to clients on 6 March, he went on to say: "We think current trading is positive with recovery in the London market which should result in improved forward sales by April."

Friday March 13

INTERIM DIVIDEND PAYMENT DATE

Motorpoint Group, Rank Group, SSE

QUARTERLY PAYMENT DATE

Carnival

INTERNATIONAL ECONOMIC ANNOUNCEMENTS

Crude Oil Inventories (US) (14:30)

Import and Export Price Indices (US) (12:30)

U. of Michigan Confidence (Prelim) (US) (15:00)

FINALS

Eurocell , Triple Point Social Housing Reit

AGMS

Banco Bilbao Vizcaya Argentaria SA

FINAL DIVIDEND PAYMENT DATE

Avon Rubber, JPMorgan Russian Securities