Tuesday preview: UK employment, Netflix in focus
The market spotlight in the UK on Tuesday will be firmly on the labour market, with both economic data and some well-known corporates likely to help to shed some light on the current situation.
In global markets, the focus will be on a steady stream of corporate announcements in the States, including from Bank of America and Johnson&Johnson before the opening bell, followed by IBM and Netflix after the close.
Economists are forecasting that the rate of unemployment in Britain will edge up by a tenth of a percentage point, from 3.9% in January to 4.0% for February, alongside an acceleration in the rate of growth in headline earnings from 3.4% to 3.6%.
Nevertheless, there may be scope for a positive surprise, says Barclays Research, if stockpiling ahead of the original Brexit date boosted hiring as it did monthly GDP, although "Q1 19 inventory-fuelled upside surprises to growth to be reversed from Q2 onwards."
Barclays expects unemployment to have held at 3.9% and wage growth to have picked up a tad less, to 3.5%.
Global recruiter Hays is among the corporates set to update its shareholders, with Numis's Steve Woolf anticipating a further slowdown in net fee growth during the group's fiscal third quarter to 8% on a year-on-year basis, after an increase of 9% over the preceding three months.
According to the analyst, market conditions had "softened slightly" but the firm's focus on consultant productivity should allow for double-digit growth in the back half of the year.
Woolf also emphasised that companies in the UK were continuing to defer investment decisions.
In New Zealand however, whose construction sector was the group's biggest market, the analyst conceded that there was an ongoing slowdown.
"Elsewhere, we expect the strong growth in the US, Asia and EMEA ex-Germany to continue, benefiting from both additional headcount, and greater productivity from the existing consultant base."
For Ashmore's third quarter trading update meanwhile, Numis's David McCann had penciled-in assets under management of $80.0bn, net flows of -$0.7bn and and performance gains of $3.9bn.
The analyst saw downside risks for the fund manager's net flows in calendar year 2019.
He anticipated a decline of -$4.3bn and told clients that, at about $5bn, the consensus was being "somewhat complacent and likely not factoring in the lag between weakening EM sentiment and Ashmore specific flows."
Nevertheless, "our negative recommendation is a short-term tactical call," he clarified.
"Long term we are fans of Ashmore – but not in the short term given the risks we see to both short-term valuation and forecast."
Regarding Netflix, the analyst consensus was for the streaming video giant to post adjusted earnings per share of $0.58, with the focus likely to be on what the company planned to counter competition from new entrants into the space, including Apple and Disney.
Tuesday April 16
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Capacity Utilisation (US) (14:15)
Industrial Production (US) (14:15)
ZEW Survey (EU) - Economic Sentiment (10:00)
ZEW Survey (GER) - Current Situation (10:00)
ZEW Survey (GER) - Economic Sentiment (10:00)
Card Factory, Flowtech Fluidpower, JD Sports Fashion, Parity Group, Telit Communications
Legal & General Group
Aberdeen Emerging Markets Investment Company, Cloudbuy, Eland Oil & Gas, Herald Investment Trust, Quixant, XP Power Ltd. (DI)
BHP Group, Hays, Mediclinic International
UK ECONOMIC ANNOUNCEMENTS
Claimant Count Rate (09:30)
FINAL EX-DIVIDEND DATE
Sagicor Financial Corporation Limited (DI)