Friday preview: US fourth quarter GDP, BT third quarter interims
The US economy slowed in the fourth quarter compared to a year ago, the advance estimate from the Commerce Department is expected to show on Friday.
BT Group
105.45p
16:20 26/04/24
Fixed Line Telecommunications
1,825.00
16:19 26/04/24
FTSE 100
8,142.24
16:20 26/04/24
FTSE 350
4,471.00
16:20 26/04/24
FTSE All-Share
4,424.37
16:20 26/04/24
Economists predict gross domestic product rose 2.2% year-on-year in the fourth quarter, easing back from 3.5% growth in the previous three months.
Household spending, which accounts for almost 70% of the economy, is expected to increase 2.5%. Analysts anticipate outlays provided a small gain while the trade deficit dragged.
The Congressional Budget Office on Tuesday said it expects GDP rose 2.3% in 2017 and 1.9% in 2018 after a 1.8% rise in 2016.
US President Donald Trump vowed to boost economic growth to 3.5% during his presidential campaign, by cutting individual and corporate taxes and reining in regulations. GDP growth of 3.5% would mark the fastest pace of expansion since 2004.
“My great economists don’t want me to say this, but I think we can do better than that,” he told the Economic Club of New York in September.
Friday will also see the release of US durable goods orders data and the University of Michigan’s consumer confidence survey.
On the corporate calendar, BT Group reports its third quarter results amid an accounting scandal at the telecoms giant‘s Italian business.
In October, the company revealed it discovered “inappropriate management behaviour” in its Italian division, which would cost £145m. On Tuesday the company said the cost was put at £530m.
The company warned full year profits would be £300m lower than previously expected, also due to international corporate clients cutting back after the Brexit vote and UK government departments reducing their spending.
Meanwhile, Italian prosecutors were opening their own investigation into BT Italia over claims of false accounting and embezzlement.
For the third quarter results, the consensus forecast is for a 1% increase in revenue to £6.13bn and a 4% decline in earnings before interest, tax, depreciation and amortisation (EBITDA) to £1.98bn with tough comparatives.
“We do not expect BT to change its fiscal year 2017 guidance of growth in underlying revenue (consensus 0 to +1%), EBITDA of £7.9bn (cons £7.87bn), and normalised free cash flow of £3.1-3.2bn (consensus £3.16bn),” said Deutsche Bank.
“Overall - We see BT as a well-positioned converged operator, but are wary of regulatory and competitive pressures leading to downside risk to estimates. BT does not look expensive on c8% estimated FCF yield for 2017E on a calendarised basis (post pension payments).”
Friday 27 January
INTERIM DIVIDEND PAYMENT DATE
Aberdeen New Dawn Investment Trust, Auto Trader Group , Burberry Group, Cranswick, Dixons Carphone , Ensor Holdings, Fulcrum Utility Services Ltd. (DI), Latham (James), Livermore Investments Group Ltd., Micro Focus International, Northern 2 VCT, Northern 3 VCT, RPC Group, Speedy Hire, Supergroup
QUARTERLY PAYMENT DATE
BlackRock Income Strategies Trust , Value and Income Trust
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Durable Goods Orders (US) (13:30)
Gross Domestic Product (US) (13:30)
M3 Money Supply (EU) (09:00)
U. of Michigan Confidence (US) (15:00)
Q3
BT Group
FINALS
Kcell Joint Stock Co GDR (Reg S), PJSC Magnit GDR (REG S)
AGMS
Caledonian Trust, Nektan (DI), Treatt
UK ECONOMIC ANNOUNCEMENTS
Nationwide House Price Index (07:00)
FINAL DIVIDEND PAYMENT DATE
Character Group, Inland Homes, Standard Life European Private Equity Trust