Weekly outlook: UK and US to reveal house price data and Prudential reports
Monday 28 August
- In Asia, quarterly results from BYD
Tuesday 29 August
- British Retail Consortium shop price index
- US Conference Board consumer confidence survey
- US Job Openings and Labor Turnover Survey (JOLTS)
- Bunzl half-year results
- US and UK house prices data
On Tuesday, the latest instalment of the monthly S&P Case-Shiller house price index will be revealed, while Nationwide unveils its own analysis of UK prices on Wednesday.
AJ Bell investment director Russ Mould and head of financial analysis Danni Hewson said the two data sets will give investors clues on the current state of consumer confidence both sides of the Atlantic.
They said: “The key issue will be the same in the UK and US – to what degree are higher interest rates, and thus mortgage costs, cooling the housing market, in turn dampening consumers’ confidence and their propensity and willingness to spend and, ultimately, gumming up two key drivers of economic growth?
“In the US, the standard 30-year mortgage rate has shot up to levels last seen in 2002 and that has taken its toll on some segments of the housing market, especially as average asking prices are up about 150% since then and reside just a couple of percentage points off their highs.
“In June, US new homes sales were up a remarkable 24% year-on-year, but existing homes sales were down 19%, pending homes sales were down 16% while new housing starts were down 10% and new housing permits by 15% year-on-year,” they said.
“The startling gap between new home sales and the rest may be the result of builders incentivising buyers with sweetened deals and, effectively, subsidised mortgage rates.
“This method can keep new homes sales going for so long, but the builders are clearly taking a bet that the US Federal Reserve will cut rates fairly soon, as they may not be able to take the margin hit for too long, and nor do they wish to run the risk of going into a downturn with a lot of land and finished homes on their hands should the economy turn south.”
They added: “Meanwhile, over in the UK, the Nationwide house price index will doubtless reflect the trend shown by equivalent studies from Halifax and also Rightmove. Last time around, for the month of July, the Nationwide survey stated that the average UK house price had dropped by 3.4% year-on-year to just under £261,000. That was the third consecutive year-on-year decline.”
- In Asia, quarterly results from Ping An Insurance and Xiaomi
- In Europe, quarterly results from Bruno Cucinelli
- In the US, quarterly results from Pinduoduo, HP Inc, HP Enterprises, Nio, Best Buy and JM Smucker
Wednesday 30 August
- First-half results from Prudential and Bens Creek
Financial services giant Prudential will unveil its first-half results on Wednesday. Hargreaves Lansdown equity analyst Matt Britzman said investors will be keeping a close eye on the performance of the firm’s Asian business.
He said: “Last investors heard, performance was being helped by the reopening of China and Hong Kong, boosting sales and demand for savings products. This is especially good news for Hong Kong operations, a key market.
“Due to the rising cost of medical attention, visitors to the region are highly likely to buy insurance. Half-year results next week should shed some light on how things are progressing, with the backdrop of a weaker than expected Chinese economy raising some questions.
“Looking further ahead, the Asian business should benefit from long-term economic development in its markets, driving increased demand for PRU’s insurance products – since in many cases, state-sponsored social security has never got off the ground. A focus on regular premium products like life and health insurance should hopefully make profits reasonably dependable although of course there are no guarantees.”
- UK mortgage approvals
- German retail sales
- US ADP employment survey
- US pending homes sales
- US oil inventories
- In Australia, quarterly results from Brambles
- In Europe, quarterly results from Illiad and Delivery Hero
- In the US, quarterly results from Salesforce, Brown-Forman and Chewy
Thursday 31 August
- First-half results from Somero Enterprises and Camellia
- Chinese purchasing managers’ indices (PMIs) for manufacturing and services industries
- EU inflation
- Grafton first-half results
- US Personal Consumption Expenditure (PCE) index
- Challenger, Gray & Christmas job cuts survey
- US weekly initial unemployment claims
- In Asia, quarterly results from Industrial and Commercial Bank of China
- In Europe, quarterly results from UBS and Pernod Ricard
- In the US, quarterly results from Broadcom, VMWare, Lululemon, Dollar General, Dell, Hormel Foods and Campbell Soup
Friday 1 September
- First-half results from Somero Enterprises and Sportech
- Purchasing managers’ indices (PMIs) for manufacturing from Japan, Asia, Europe, the UK and USA
- US non-farm payrolls, wage growth and unemployment rate
- US car sales