Weekly outlook: Bojo’s first full week as PM; central bank rate decisions; fund groups report

The key events for UK wealth managers for the week starting 29 July

This week is the first full one with Boris Johnson as the UK’s prime minister. It also sees rate decisions from three big central banks and several fund groups deliver updates, as well as Link Fund Solutions due to give an update on the suspended Woodford Equity Income fund.

The announcement of Boris Johnson as Tory leader and de facto prime minister was widely anticipated by the market and is unlikely to have much immediate impact on investments. But some financial services leaders in the UK are worried by Johnson’s far more aggressive approach to Brexit.

Investec multi-asset manager Jason Borbora-Sheen said it is therefore vital for investors to take a selective approach to the UK and he believes there will be buying opportunities once there is more clarity over the Brexit outcome.

“[Johnson’s] appointment arguably increases the odds of a hard or no-deal Brexit, which will likely cause sterling to weaken and would hurt the UK’s near-term growth opportunities, favouring the UK-listed multinationals over domestic plays,” he said. “After a short while, however, we would expect investors to take advantage of the situation and start to look for oversold opportunities in the UK and add exposure.”

Monday 29 July

– Link Fund Services due to update on Woodford Equity Income

The fund has been suspended for more than 50 days now and Woodford Investment Management continues to charge management fees in the face of industry-wide protest. It is widely expected that the fund will remain frozen for the foreseeable future as Woodford continues to reshape the portfolio.

Tuesday 30 July

– Bank of Japan rate decision

Economists expect the BoJ to leave the rate unchanged at -0.1% and stick to its plan to cap the 10-year government bond yield at 0.1% through its ¥80trn a year quantitative easing programme.

– Gam half-year trading results

– Reckitt Benckiser Group trading announcement

– Jupiter and Provident Financial interim results

Wednesday 31 July

– US Federal Reserve rate decision

AJ Bell investment director Russ Mould said markets are putting a 75% chance on a one-quarter percentage point cut and a one-in-four chance on a half-point cut – either way, action is seen as certain.

The issue then, Mould said, is do markets:

  • Rejoice as they feast off more cheap cash;
  • Pause for breath after a good run, as the policy move has been well flagged already;
  • Or run for the hills because they decide the need for rate cuts means an economic downturn is coming

– Lloyds Banking Group, St James’s Place, Man Group and Taylor Wimpey interim results

– EU GDP

– US crude oil inventories

– 3i Group trading update

Thursday 1 August

– Bank of England rate decision

Wage growth is accelerating and unemployment is low but with Brexit looming the chances of the BoE changing the 0.75% rate or the £435bn QE programme seem slim.

– UK PMI manufacturing

– Royal Dutch Shell Q2 results

– Schroders, Barclays and British American Tobacco interim results

On Barclays, AJ Bell’s Mould said the bank’s shares are not much higher than three years ago following the Brexit referendum despite the board’s success in fending off activist investor Edward Bramson. According to Mould, analysts will be looking at two numbers for Barclays: pre-tax profit and the dividend.

– Deadline for comments on the FCA’s discussion paper on intergenerational differences

The regulator is asking for input into a discussion with industry, consumers and their representatives, regulators and academics to understand the changing financial needs across generations for UK financial services markets.

– EU, Germany and US PMI manufacturing figures

– US initial jobless claims

Friday 2 August

– BT interim results

– RBS interim results and trading update

– US unemployment rate

– US non-farm payrolls

– UK PMI construction

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