Weekly outlook: Link updates on Woodford; US jobs update; Sainsbury and Persimmon results

The key events for UK wealth managers for the week starting 1 July

Monday 1 July

– Link Fund Solutions due to update on status of frozen Woodford Equity Income fund

As authorised corporate director (ACD) of the fund, Link is obliged to update investors on whether it intends to keep the fund closed to trading at least every 28 days. It first announced the fund was being frozen on 3 June so 1 July marks 28 days later.

Link came under pressure last week as FCA chief executive Andrew Bailey revealed in his appearance before the Treasury select committee that the regulator stepped up its communication with the ACD February 2018 when the fund broke past the 10% limit on unquoted stocks.

– UK manufacturing purchasing managers’ index (PMIs)

The scores for May were not that encouraging across the board. Manufacturing came in at 49.4, its lowest level since July 2016 and construction came in below 50 for the third time in four months at 48.6. The only good news came from services, which improved for the second month in a row to 51, although even that was below the 12-month average of 51.9.

– EU unemployment figure

In May, this figure was 7.6%, its lowest level since January 2009.

Tuesday 2 July

– First-half results from land developer St Modwen Properties

– Interest rate decision from the Reserve Bank of Australia

– UK construction purchasing managers’ index

Wednesday 3 July

– Sainsbury first-quarter results statement

AJ Bell investment director Russ Mould noted shares are down by around more than third over the past year which leaves them trading at their lowest level in at least 30 years.

There are three possible reasons for this, he added: the ongoing onslaught from the discounters such as Aldi and Lidl; the failure of the planned merger with Asda; and weak sales recorded in full-year results back in May.

– Full-year results from real estate agent disruptor Purplebricks and retailer TheWorks

Thursday 4 July

– Persimmon first-half trading update.

Shares in the York-based house builder are down by a quarter over the past year, dogged by the UK economy, worries that the housing market is running out of steam, and a host of company-specific issues.

Persimmon has already flagged in May’s first-quarter update that sales per site were down by around 5%, although legal completions in the first half are expected to be broadly flat against last year’s 8,072. Prices are likely to be higher against last year’s first-half average of £215,813.

Mould said new chief executive David Jenkinson, who took over last November when Jeff Fairburn left amid the furore over the company bonus scheme, will be looking to reassure, especially on the issue of build quality and customer satisfaction.

Friday 5 July

 – US non-farm payrolls

Mould said the jobs market has been running hot for a long time, although recent data has become a little patchier. In May, America added just 75,000 non-farm payrolls, well below expectations and the 12-month average gain of 190,000. The headline unemployment rate was 3.6%, the lowest level since 1969 and the average hourly wage rose by 3.1% to $27.83 an hour.

Mould said: “However, the initial estimates for March and April were revised down, which is a trend to watch, as this trend is usually more prevalent during a slowdown or recession. It is too early to make that call right now, but the US Federal Reserve is clearly concerned about growth, given its apparent new-found bias to cutting interest rates rather than raising them.”

 

 

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