Tuesday preview: Georgia, UK GDP on investors' minds

updated: 4 January 2021 at 3:57pm Author: Alexander Bueso

(Sharecast News) - Elections in the US state of Georgia and a revised reading on third quarter gross domestic product will be foremost on the minds of investors in the UK and elsewhere.
Voters in Georgia will on Tuesday choose their two senators in separate run-off votes that will decide whether Republicans retain control of the US Senate, the upper house of the country's Congress.

Should they fail to do so, some observers expect Democrats to push through sweeping government spending measures (and tax increases), which may support so-called 'value' stocks.

Initially at least however, financial markets may react poorly, Jeffrey Halley, senior market analyst at Oanda believes.

Furthermore, the results might not be known for a few days, Halley cautioned.

"That being said, the early turnout numbers are particularly high, with some tentative signs that look promising for Democrats, and polling, while somewhat sparse, signals that both races are very close at this point," chipped in Brett Ryan at Deutsche Bank.

"As with the November elections, it is important to remember that the results will not likely be known on Tuesday, given that Georgia cannot start counting the mail-in ballots until the day of the election."

Revised UK GDP data meanwhile are expected to be little changed from a preliminary reading showing growth of 15.5% quarter-on-quarter.

The details of the report may yield a substantial and positive surprise.

Whereas the Bank of England has penciled-in a savings rate of approximately 10%, economists at Barclays Research anticipate a reading closer to 20%.

Also due out on home shores are figures on public sector net borrowing for November, courtesy of the Office for National Statistics, at 0700 GMT.

Stateside, investors will also be keeping tabs on the ISM services sector Purchasing Managers' Index for December.

On the corporate side of things meanwhile, trading updates from Next and Morrison will help investors gauge the health of the retail sector over the Christmas holidays.

Tuesday 05 January

Trading Announcements

Next, Morrison (Wm) Supermarkets

AGMs

Edenville Energy

Final Dividend Payment Date

Town Centre Securities

Interim Dividend Payment Date

Great Portland Estates, TwentyFour Select Monthly Income Fund Limited

International Economic Announcements

Retail Sales (GER) (07:00)

Unemployment Rate (GER) (08:55)

M3 Money Supply (EU) (09:00)

ISM Services (US) (15:00)

ISM Manufacturing (US) (15:00)

Auto Sales (US) (20:30)