Weekly market review and outlook: PPI deadline relieves banks

Next week will see a number of potentially important economic releases being issued

Article updated: 2 September 2019 9:00am Author: Helal Miah

Review

The shortened trading week saw little in the way of economic and corporate news. The UK FTSE 100 index moved higher on the back of improving sentiment with regard to the ongoing trade spat between China and the US, along with Brexit news putting pressure on the pound.

Shares in FTSE 100 constituent Micro Focus were hammered as a result of a cut to revenue growth forecasts, the tumble of shares and cut of guidance could in turn lead to the group being relegated to the FTSE 250.

Banks probably breathed a sigh of relief with the deadline for PPI claims; the amounts paid out have been significant with, for example, Lloyds having returned over £20 billion in compensation so far.

The week ahead

Next week, UK company results will focus on two housebuilders with both Barratt Developments and Berkeley Group reporting finals results and a trading update, respectively. The sector is viewed as being highly geared to Brexit and the market will be keen to see the effects that it is having on consumer confidence. Another company of interest to many but may go under the radar screen for some, is Melrose. A group famous for its ‘buy, improve and sell’ strategy focussed on the engineering sector; its most recent acquisition was GKN and analysts will be keen to hear of any improvement in margins.

There will be an increase in economic releases from around the globe with the exception being from the UK. Around 70 events are classed as being potentially important to economists who cast their eye over foreign shores.

Probably of most interest will be the nonfarm payroll from the US on Friday which is widely regarded as being a leading barometer on determining the overall health of the economy. The consensus is for a fall in the number of jobs created from 164,000 to 150,000.

Monday sees a raft of manufacturing and construction data from leading European and Asia/Pacific nations, with predictions for the stats to show little in the way of change. The US follows on Tuesday with the same data, but expectations here are for the numbers to show a slight improvement.


All information given including prices, yields and our opinion is correct at the time of publication. Our opinions on investments can change at any time and for our latest view please go to www.share.com. To understand how our Investment research team arrive at their views please read our Investment Research Policy.

Helal Miah portrait photo
Helal Miah

Investment Research Analyst

After graduating with an economics degree from University College London, Helal started his career within private banking at Smith & Williamson Investment Management and later held analyst and fund manager roles with the Industrial Bank of Japan, Schroders and Mitsubishi Corporation. He is a chartered fellow of the Chartered Institute for Securities & Investment. 

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