Weekly outlook: Analysts await possible Pru demerger update; UK wages and employment data

The key events for UK wealth managers for the week starting 12 August

Tuesday 13 August

– UK wage growth and employment figures

The labour market has been “the main bright spot” in the UK economy amid the seemingly-never ending Brexit uncertainty, says Canaccord Genuity Wealth Management investment manager Sam Buckingham. Unemployment in May was close to record lows at 3.8%, while the number of people employed was stuck around 76%.

But AJ Bell investment director Russ Mould says appearances can be deceiving noting that the self-employment and gig economy jobs have driven a good chunk of the gains in employment over the past few years – around 5 million workers out of a total employment figure of 32.8 million to be specific.

More focus will be on wage growth, says Buckingham, as the market keeps a watchful eye on inflationary pressures as political uncertainty continues to weigh on the pound. Wage growth has proven far stickier over the years although it reached 3.4% in May, including bonuses, handily beating last month’s inflation figure of 2.0%.

– Trading updates from FTSE 250 firms and Neil Woodford favourites Card Factory and AA

– US inflation figures and NFIB smaller companies confidence survey

Wednesday 14 August

– Prudential interim results

Analysts will be combing the FTSE 100 insurer’s interim results for any news on the demerger of its UK asset management business M&G Prudential.

No exact timetable has been given yet for the demerger, but it is expected to complete by the end of 2019 or in Q1 of 2020 at the latest.

In the meantime, M&G Prudential has been busy appointing board members, raising debt and de-emphasising its UK annuities business in a move that echoes Standard Life Aberdeen.

Mould notes that analysts are expecting low-single digit growth from Pru’s earnings for the full year and will be waiting to see how well its Asia business, which has been the real engine of the business, sits alongside its US operations.

– Admiral interim update

Mould says shares in the car and home insurance company have been volatile over the last year as Admiral has seen a slowdown in its core UK motor business and had to deal with several regulatory hurdles including an FCA probe into unfair pricing practices between new and existing customers.

– UK inflation data

“It will also be worth keeping an eye on the latest inflation figures because the increase in the retail price index, or RPI, will determine how much the cost of train season tickets will go up in January,” says Mould. “The last reading, for June, was 2.9%, so commuters will have their fingers and toes crossed.”

– Eurozone Q2 GDP data

“The eurozone economy has suffered a significant hit to momentum in economic growth, with a multitude of factors to the fore, most significantly global trade tensions, as well as a slowdown in the auto sector following changes in regulation relating to emission testing,” says Buckingham.

“On Wednesday we get a look at the revised Q2 GDP growth reading. The first estimate, released on 31 July, beat expectations marginally at 1.1%. Since this first estimate we’ve also received the finalised July Markit Composite PMI for the eurozone, which was unchanged, indicating a reduced chance for the GDP figure to be revised materially up or down.

Thursday 15 August

– UK retail sales

– US industrial production and capacity utilisation data

Friday 16 August

– US housing permits and new building starts data

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