Wednesday preview: Canada-US trade talks, Petrofac in focus

The market spotlight on Wednesday will continue to be on international trade, specifically on talks between the US and Canada.

Somewhat ironically, if Canada did not 'play ball' then the White House would need to go through Congress, where some observers said it would face very stiff opposition and perhaps even more so following the next mid-term elections.

Nevertheless, markets would be watching carefully, both because of the direct hit to bilateral trade between the two countries which might result and because of what the result of the negotiations might imply about the outlook for trade talks (or lack thereof) with China and Europe.

Against that backdrop, no major economic releases were scheduled for the UK on Wednesday.

Stateside meanwhile, at 1330 BST the US Commerce Department was due to publish a revised reading on second quarter gross domestic product which was expected to reveal an annualised rate of growth of 4.0%, which would be just a smidgen below a preliminary reading of 4.1%.

On the company side of things, only a handful of companies are slated to update investors.

Among those was Petrofac, for whom analysts at UBS said the key aspects to focus on in its interims would be: order intake, margins, liquidity and the ongoing investigation by the Serious Fraud Office.

Over at Numis meanwhile, analyst James Hubbard had penciled-in "clean" net income of $166.0m for the latest six-month period at Petrofac, despite a dip in the company's EBITDA margins from 12.4% to 11.9% - although he saw upside risk on margins.

Like UBS, and after having failed 'to deliver' on its promises over the past 12 months or so, what the company had to say around the outlook for its backlog growth over the next year would be "particularly important", Hubbard said.

In terms of the 'delta' that he was looking for, Hubbard added that - at a minimum - the outfit needed to clinch another $4.0bn-worth of awards by end-2018 in order for it to be able to meet his estimate for 2019 revenues.

Wednesday 29 August

INTERIMS

Fisher (James) & Sons, IQE, Permanent TSB Group Holdings, Petrofac Ltd., The Gym Group

INTERIM DIVIDEND PAYMENT DATE

Jupiter Fund Management

INTERNATIONAL ECONOMIC ANNOUNCEMENTS

Crude Oil Inventories (US) (15:30)

GDP (Preliminary) (US) (13:30)

GFK Consumer Confidence (GER) (07:00)

MBA Mortgage Applications (US) (12:00)

Pending Homes Sales (US) (15:00)

AGMS

Atlas Mara Limited (DI), Lindsell Train Inv Trust, Montanaro European Smaller Companies Trust, Puma Vct 13, Ultimate Sports Group, Vordere

TRADING ANNOUNCEMENTS

Diploma

UK ECONOMIC ANNOUNCEMENTS

Nationwide House Price Index (07:00)