Weekly Outlook: US jobs data and Currys trading update

02 September 2024

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Hannah Williford

Monday 2 September

First-half results from Kainos and Ashtead Technology
Purchasing managers’ indices for manufacturing industries in Japan, Asia, the EU and UK
In the US, quarterly results from ZScaler

Tuesday 3 September

Full-year results from Alumasc and Craneware
First-half results from Johnson Service, Michelmersh Brick, Midwich and STV
Trading statements from DS Smith and Watches of Switzerland
Purchasing managers’ indices for manufacturing industries in the USA
US car sales
In the US, quarterly results from HP Enterprises, Hormel Foods, Dick’s Sporting Goods and GameStop

Wednesday 4 September

Full-year results from Barratt Developments
First-half results from M&G, Direct Line and Hilton Food
Purchasing managers’ indices for service industries in Japan, Asia, the EU and UK
Federal Reserve Beige Book
US factory orders
Interest rate decision from the Bank of Canada
In Europe, quarterly results from Tod’s
In the US, quarterly results from Ciena

The US will release a set of labour data from Wednesday to Friday, including the monthly Job Opening and Labor Turnover Survey (JOLTS), the weekly unemployment claims figure, and the monthly non-farm payroll, wage growth, and unemployment data.

The data will come ahead of the Federal Reserve’s interest rate announcement on 18 September, as markets attempt to determine to what degree the Fed will cut rates. Currently, markets sit at a 70% chance of a quarter-point cut.

Russ Mould, AJ Bell investment director, and Dan Coatsworth, AJ Bell investment analyst, said: “Stock, bond, currency and commodity markets continue to ponder whether they will get the dream scenario of a cooling in inflation, a soft economic landing and interest rate cuts from central bankers.

“Policymakers continue to watch inflation and unemployment as key indicators, even if both sets of data are lagging and, in the case of the jobs figures, prone to revision, especially in the USA – the Bureau of Labor Statistics has just revised down its estimate for US job creation in the past year by more than 800,000 jobs, or a quarter of total of new jobs added, according to the preliminary figures.

“That combination of backward-looking figures and revisions to them only increase the risk that central bankers – and investors – are led up the garden path by this macroeconomic dataset, but financial markets pay slavish attention to the jobs figures all the same and we are due the latest batch from America in the coming week.”

The last JOLTS reading revealed 8.2m vacancies, an increase from April’s 7.9m. However, this number still remains well below the 12.2m peak following Covid, and looks more in line with pre-pandemic levels. For Thursday’s weekly unemployment claim, the number has traditionally hovered below 250,000, and a deviation of much higher could be a warning of a hard landing, the AJ Bell duo said.

For Friday’s release, the 114,000 jobs added in July will be the benchmark figure for August, with the headline unemployment rate at 4.3%.

“This is still a historically low figure. The Fed did cut when the jobless rate was around this level in 2001 and 2020, albeit in response to the collapse of the technology stock market bubble and the pandemic, respectively,” Mould and Coatsworth said.

“Meanwhile, July saw wage growth cool to 3.6% year-on-year, another potential pointer to suggest that the Fed finally has room to start lowering the headline cost of money.”

Thursday 5 September

Full-year results from Genus and Ashmore
First-half results from Vistry, WAG Payment Solutions, Churchill China, Bakkavor and Funding Circle
Trading statement from Safestore
German factory orders
EU retail sales
Purchasing managers’ index for the construction industry in the UK
Challenger, Gray and Christmas job cuts survey
US oil inventories
In the US, quarterly results from Broadcom and DocuSign
Currys trading update

Currys, a retailer for electrical appliances, technology products and services, will provide its trading update on Thursday 5 September.

In the past year, Currys’ share price has near doubled with the help of an improved balance sheet, two earnings upgrades, and a failed takeover bid from investor Elliot.

“Currys’ shares have motored past Elliott’s offer price and kept going, so this trading update that will cover the first four months of the new fiscal year to the end of April will be the next test of investors’ more positive view of the company, which has begun to build some profit momentum thanks to improved trading in the Nordic region and the UK, despite an economic backdrop that is still difficult,” Mould and Coatsworth said.

In the trading update, analysts will focus on like-for-like sales trends for its UK and Nordic businesses. In the first four months of 2024, like-for-like revenues dropped 4% year-on-yera for the group as a whole, brought down by an 8% drop in the Nordics and 2% drop in UK and Ireland, but buoyed by a 3% increase in the Greek business.

For the full year to April 2025, analysts are anticipating group sales of £8.5bn, adjusted pre-tax profit of £136m, and a resumed dividend payment at 1.8p a share.

“Improved profitability, recurring revenues from the iD Mobile phone contract deals and a strengthened balance sheet all underpin the anticipated return to the dividend list. Currys completed the sale of Kotsovolos in Greece back in April and stated it would use the £156m in net proceeds to reduce debt,” Mould and Coatsworth said.

“At the end of fiscal 2024, the company had net cash of £96m, although that was before taking into account leases of £1bn and £171m in pension obligations – interest and leases and pensions are expected to come with a cash cost of £310m in the current year, so management will be looking to improve profits further over time, given this expenditure.”