Weekly outlook: Spending review; housebuilder updates; US employment data

The key events for UK wealth managers for the week starting 2 September

With the Brexit deadline of 31 October now fast approaching, the government has hastily convened a Spending Review that will take place on Wednesday, although it could fly under the radar owing to the ongoing fallout from Boris Johnson’s inflammatory decision to prorogue parliament.

Elsewhere, big companies reporting include housebuilders Barratt Developments, Berkeley Group and Redrow, and packaging group DS Smith while in the wealth management sector Mattioli Woods updates the market.

On the macro side, there will be a slew of PMI manufacturing figures and US employment data that the industry will be watching ahead of the Fed’s next rate meeting.

Monday 2 September

– PMI manufacturing from UK, China, Europe and Asia

Tuesday 3 September

– Mattioli Woods final results

– US ISM non-manufacturing

Canaccord Genuity investment manager Sam Buckingham noted last month’s reading was the weakest since August 2016.

“While the deteriorating manufacturing sector in the US has been widely expected due to trade tensions, it is worrying that this has now spread to services, which accounts for about 90% of the economy.

“This month economists’ consensus is for a slight recovery, with the index jumping from 53.7 to 54.1, still healthily above the 50-mark.”

– DS Smith interim results

Analysts at the Share Centre said the packaging group has seen a modest recovery in its shares so far this year but they remain below the level seen at the same time last year.

“The full year figures in June showed a good contribution to profits from the recently acquired Europac and Interstate Resources, so investors will be looking to see if that has carried on into the first quarter of the new financial year.”

– Latest quarterly FTSE 100 index reshuffle

Wednesday 4 September

– Spending Review

AJ Bell noted the last Spending Review in 2015 was focused on cuts and austerity, but this week’s event is likely to focus on spending. It said the review will only cover one year, so it’s likely chancellor Sajid Javid will massively overhaul tax regimes, but rather some quick wins and injections of money could be on the cards.

Areas that could be given attention include income tax relief, inheritance tax and stamp duty, as well as the pensions dashboard.

– Barratt Developments final results

The FTSE 100 housebuilder is the second largest holding in the suspended Woodford Equity Income fund.

AJ Bell investment director Russ Mould said: “In contrast to those of some of its peers, shares in Barratt are up over the past year. A series of upbeat trading statements have helped the stock to shrug off fears over Brexit, the UK economy and cost pressures. July’s trading update was also reassuring and analysts will now get the chance to dig deeper and also perhaps get some guidance for the next financial year.”

– Lindsell Train AGM

– Polar Capital Technology Trust AGM

– China PMI

– Eurozone PMI

Thursday 5 September

– Redrow full-year results

– US oil inventories

Friday 6 September

– Ashmore Group final results

US employment data

Psigma Investment Management head of investment strategy Rory McPherson said it is expected that around 160k jobs were produced by the US economy in August.

He said: “This will be keenly watched, along with the accompanying data on wages, unemployment and participation rate, as it feeds into expectations for interest rate cuts which are firmly fixed on a cut at the 18 September Fed meeting.”

Buckingham said despite a slowing economy, the US labour market has remained strong so far, with the unemployment rate and initial jobless claims around record lows.

But, he added: “Having said that, the upcoming employment report is forecasting a drop in the average hourly earnings year-over-year rate from 3.2% down to 3% – if it comes out in line with expectations, wage growth will have dropped 0.4% in just six months.”

– Eurozone Q2 growth

– Berkeley Group trading update

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