Weekly outlook: Jupiter, Blackrock and Man Group update markets

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09 October 2020

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Monday 12 October

World Bank and International Monetary Fund meetings (all week)
The International Longevity Centre launches the Health equals Wealth: The global longevity dividend report at the virtual G20 finance ministers and central banking meeting. The report looks at how policymakers can tap into the fact older people are increasingly important consumers, workers, carers and volunteers.
OECD: Unemployment rates
Columbus Day public holiday in the USA

Tuesday 13 October

Barclaycard: Consumer spending, September 2020

Aviva head of savings and retirement Alistair McQueen says the latest Barclaycard data will indicate the scale of the recovery in consumer spending from the trough of lockdown over the summer months.

McQueen says: “Healthy expenditure may have been in part the result of higher confidence levels among consumers in early-to-mid September. Fears over contracting coronavirus appeared to dampen, residual demand built up from the Eat Out to Help Out scheme and lower VAT rate spilled over into early September and the hotter weather all compounded to drive consumers to UK high streets.

But fears over the trajectory of the virus and continued restrictions in parts of the UK are likely to dampen spending over winter, he says. “Despite the government laying out plans for long term labour market support, it may not be able to offset a rise in unemployment, especially in sectors which are unable to operate in line with social distancing measures. These concerns will feed into lower confidence levels, causing consumers to rein in spending and increase precautionary saving in preparation for further financial strain.”

BRC / KPMG: Retail Sales Monitor, September 2020
Trading update from Sabre Insurance
UK unemployment and wage growth data

Aviva workplace savings manager Laura Stewart-Smith expects the latest ONS labour market overview will point to disruption in the UK’s work force.

“Headline unemployment rates have been kept relatively low over the course of the pandemic in part the result of the government’s support measures shielding people from mass job losses,” Stewart-Smith says.

“Headwinds are forming within the economic inactivity rate – this refers to people who have dropped out of the labour force altogether. Lower labour market participation will impact the UK’s economic recovery as it will result in a long-term drain in skills, talent and expertise.

But she adds: “The government’s plan to improve skills among out-of-work candidates and encourage employers to take on staff through the Kick Start scheme could boost labour market participation by offering people a route back into the work force.”

US inflation figures
Quarterly results from BlackRock, plus Johnson & Johnson, JP Morgan Chase and Citigroup

AJ Bell investment director Russ Mould says Q3 results from the big US banks this week will kick off reporting season and be a precursor to the UK banks later in the month. Analysts are expecting a big rebound in earnings per share before a slight dip back again in Q4, when lenders tend to provision most heavily for any bad news, Mould says.

He notes deposits at the big four US banks have increased 20% year-on-year to $6.3trn while loan books have advanced just 1% to $3.6trn as customers take safety in cash during the pandemic.

Wednesday 14 October

Trading updates from Asos, Barratt Developments and Just Eat Takeaway.com

Mould says Asos has regained momentum after UK volumes fell between 20-25% in the first three weeks of lockdown. It now expects sales to be up 17-19% year-on-year compared with pre-tax profit between £130m and £150m, compared to £33m a year ago.