Thursday preview: Services PMIs, US jobs data
Thursday is set to be data-heavy with a batch of services reports and US employment figures.
The Markit UK services purchasing managers’ index will be published in morning trade with economists expecting a slight slowdown in growth in December to a reading of 54.7 from 55.2 the previous month. A level above 50 indicates an expansion in sector activity while a figure below that signals a contraction.
Economists on Tuesday said UK economic growth will be somewhat contingent on the strength of the services sector after Markit revealed the manufacturing PMI expanded more than expected in December. The PMI rose to a 40-month high in December of 56.1 following a reading of 53.6 in November and beating forecasts of 53.3.
“We have recently raised our expectation for UK GDP growth in the fourth quarter of 2016 to 0.5% quarter-on-quarter from 0.4% quarter-on-quarter - and the December manufacturing purchasing managers’ survey provides support to this upgrade,” said Howard Archer, chief UK and European economist at IHS Global Insight.
“Much will clearly depend on how well the services sector performed in the fourth quarter and a lot of attention will be focused on the December services purchasing managers’ survey out on Thursday.”
China, Japan and the US are also expecting services PMIs. Nikkei’s Japan PMI and Caixin’s China index will be released in morning trade while the afternoon sees the release of US PMIs from Markit and ISM.
US employment data will be in the spotlight with ADP’s private payrolls report and the Labor Department’s initial jobless claims figures to be published in afternoon trade.
ADP is expected to reveal a 175,000 increase in the number of jobs added to the economy in December while initial jobless claims are forecast to fall to 260,000 in the week to 31 December from 265,000 the previous week.
The data comes ahead of Friday’s highly anticipated non-farm payrolls report which is expected to show US employers added 178,000 jobs in December.
In the euro-area, the European Central Bank publishes the account of its December policy meeting when it decided to extend its asset purchase programme by nine months but at a tapered pace.
On the company front, Persimmon releases a fourth quarter trading update with the focus on the housebuilder’s outlook as the formal Brexit process looms.
Ian Forrest, investment research analyst at The Share Centre, expects private sales rates growth in the “double digits” and sees revenue supported by a strong performance in average selling prices.
“Companies in the sector have provided fairly good trading figures during 2016,” Forrest said.
“Even after Brexit vote they seem relatively unaffected and we should expect the same from Persimmon.”
The analyst added: “It’s the forward looking statement that will be of more interest: expect the order book into 2017 to remain strong but could we see some caution on land and plot acquisitions?”
Thursday 05 January
TRADING STATEMENTS
Persimmon
INTERIM DIVIDEND PAYMENT DATE
Caledonia Investments, Hill & Smith Holdings, Mckay Securities, Yu Group
INTERIM EX-DIVIDEND DATE
Auto Trader Group , Aveva Group, Bisichi Mining, Dairy Crest Group, Dart Group, F&C Global Smaller Companies, Hibernia Reit , Latham (James), Livermore Investments Group Ltd., Northern 2 VCT, Northern 3 VCT, United Carpets Group
QUARTERLY PAYMENT DATE
Blackrock North American Income Trust
QUARTERLY EX-DIVIDEND DATE
BlackRock Income Strategies Trust , British Land Company, Investors Capital Trust 'A' Shares, JP Morgan Chase & Co
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Continuing Claims (US) (13:30)
Crude Oil Inventories (US) (16:00)
Producer Price Index (EU) (10:00)
SPECIAL EX-DIVIDEND DATE
European Investment Trust, GVC Holdings
AGMS
Ironveld, Mercom Capital
FINAL EX-DIVIDEND DATE
BBA Aviation 5% Cum Prf, Cerillion , Character Group, European Investment Trust, Henderson European Focus Trust, International Biotech Trust, Lowland Investment Co, McCarthy & Stone, On The Beach Group , Paragon Group Of Companies, Servoca, Stride Gaming, Topps Tiles