The Week Ahead: Asset manager earnings, ECB forum, UK consumer confidence

calendarThis week a number of asset managers release interim results: Schroders, Henderson Group, Aberdeen Asset Management and Jupiter Fund Management. With PMI figures released on Friday indicating business has suffered in the immediate aftermath of Brexit, the GfK consumer confidence survey will reveal whether this has hit consumers. In Europe, a major central banking forum takes place where Brexit will no doubt be on the agenda.

Fund Strategy looks at some key events shaping the week and what to expect.

Monday 25 July

  • Aberdeen Asset Management Q3 earnings
  • Ryanair results
  • Forum on Central Banking

The European Central Bank starts its three-day Forum on Central Banking in Portugal. Speakers include ECB President Mario Draghi, US Federal Reserve Chair Janet Yellen and Bank of England Governor Mark Carney.

  • US Markit services PMI for June

Tuesday 26 July

  • BP Q2 results

The Share Centre investment research analyst Graham Spooner says: “The Brexit fallout has worked to the benefit of the share price but also because of the stabilisation of oil price around the $50 mark. We expect the good numbers from Q1 to follow through into the latest quarter, lower costs throughout the group should help on the underlying profits along with better performances in the downstream refining and chemicals businesses when oil prices are low.

“The trading division also did well so the market should wait and see if the rights calls were made again in the second quarter.”

  • Man Group Q2 results
  • US consumer confidence

Wednesday 27 July

  • GlaxoSmithKline Q2 results

Spooner says GlaxoSmithKline’s shares have received “a bit of a boost” from the uncertainty around Brexit, as sterling fell giving their large earnings come from overseas.

He says: “We expect the momentum from Q1, where new product sales doubled, to continue into the latest quarter. Investors will want an update on the R&D pipeline, as well as any progress on the cost cutting programme.”

  • St James’s Place and Jupiter Fund Management Q2 results
  • UK GDP Q2

This week we’ll see a preliminary estimation of UK gross domestic product for the second quarter. IHS Economics chief European and UK economist Howard Archer says an increased consumer spending is likely to boost projections on the country’s GDP despite the EU referendum.

He says: “Likely decent consumer spending overall in the second quarter contributes to our belief that GDP growth could actually have improved to at least 0.5 per cent quarter-on-quarter in the second quarter from 0.4 per cent quarter-on-quarter in the first quarter despite the heightened uncertainty over the EU membership referendum.

“This suspicion is reinforced by much-improved industrial production in April and May combined, and a significantly reduced trade deficit in April and May overall.”

Thursday 28 July

  • Schroders and Henderson release H1 results
  • BT Q1 results

BT’s shares have fallen back around 10 per cent since the EU referendum, but the last trading update in May was positive with profits up 9 per cent to £3.47bn, Spooner notes.

He says: “The consumer division remains the strongest point with a healthy rise in the number of TV subscribers and broadband sales should get a boost from the proposed national rollout of an ultrafast service over the next four years. With the new Premier League season due to start soon, the market will be interested to hear what the company expects for the rest of the year.”

  • Lloyds Banking Q2 results

Spooner says Lloyds Banking’s shares remain popular with retail investors, despite being hit hard by Brexit. However, concerns remain over the fact that the bank is UK-focussed and so exposed to the property market.

  • GfK UK consumer confidence survey

The market research company did a special Brexit consumer confidence survey for the period from 30 June to 5 July when sentiment dropped to a 21-year low. Its regular monthly figures will reveal if the immediate uncertainty following the Brexit vote has subsided.

Friday 29 July

  • US GDP Q2
  • EU unemployment, June – Eurostat
  • Flash estimate EU inflation, July – Eurostat
  • Reckitt Benckiser Q2 results

The share price of consumer goods company Reckitt Benckiser has risen post Brexit as investors focussed on large cap companies with international earnings, says Spooner.

He says: “This results in a relatively steady earnings and cash flow stream. The group has been an excellent and consistent performer over the last 15 years although it had been criticised for not having enough exposure to emerging markets. Management have taken this on board and now the drive into the higher growth regions is paying dividends.”