Markets will be focussing on the UK amid a slew of economic data and Britain faces fourth quarter gross domestic product (GDP) reckoning, with economists expecting a downturn.
The coronavirus pandemic has catapulted pharma companies into the spotlight, and with Europe’s vaccine saga still ongoing, AstraZeneca is due to unveil its full year results.
Investors will also keep a close eye on any vaccine rollout hiccups in the US, with a COVID-19 vaccine shortage similar to that seen in the EU having a bigger impact on markets.
At the moment around 1.3 million Americans are being vaccinated daily, with more than 30 million people having had received their first dose. But, Dr Anthony Fauci warned there is “much more demand than there is supply.”
Weekend developments that will interest:
UK: Q4 GDP, manufacturing and industrial production, AstraZeneca results
The UK is centre stage this week. On Friday a host of data, most notably Q4 GDP figures will show whether Britain’s economy will enter a double-dip recession amid more stringent coronavirus measures.
While third quarter GDP data was better than expected with a 16% expansion, the forecast for the fourth quarter is much more troubled at just 0.9%, with the likelihood of a double-dip recession increasing following two consecutive negative contractions in the first half of 2020.
In October, following a bumper summer — the UK economy started to decline again after tougher coronavirus rules and lockdowns came into force amid the spread of a more infectious COVID-19 strain.
But, while figures are expected to contract, with experts predicting a modest contraction, private consumption and government support might boost numbers a bit.
Also on Friday, manufacturing and industrial production stats are due. If the most recent purchasing manager indices (PMIs) are a guide, then the manufacturing sector may be in for a bumper Q4 performance.
PMIs are a closely watched barometer on the health of the UK economy.
The manufacturing sector has expanded every month since the end of the first national lockdown, with a 0.7% gain in November and it’s expected to have continued the trend in December.
AstraZeneca (AZN.L) is publishing its finals on Thursday. It comes amid a raging row between the EU and pharmaceutical company over delays in deliveries of vaccine doses to the 27 member nations.
Key company results:
Bellway (BWY.L) — half-year (Tuesday)
Ocado (OCDO.L) — full-year (Tuesday)
Dunelm (DNLM.L) — half-year (Wednesday)
Redrow (RDW.L) — half-year (Wednesday)
AstraZeneca (AZN.L) — full-year (Thursday)
Ted Baker (TED.L) — Q4 (Thursday)
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US: Inflation, stimulus focus, coronavirus vaccine, consumer sentiment
The US has a quieter week when it comes to economic releases, but most notably inflation — which rose to 0.4% in January — is out on Wednesday.
Experts think that the markets bad reaction to jobs data released on Friday will increase expectations of aggressive fiscal stimulus by president Joe Biden. This in turn will fuel higher inflation expectations, and diminish speculation about earlier-than-forecasted tapering by the Federal Reserve.
“Any above-consensus read should, in our view, have a negative impact on US real rates and the dollar as the Fed’s flexible inflation targeting should keep the reaction in front-end rates muted. Our economists are broadly in line with consensus for a 0.4% month-on-month increase in headline CPI,” analysts at ING said.
There is the JOLTS job openings figure due on Tuesday, jobless claims on Thursday and consumer sentiment on Friday.
Additionally on the political sphere, former president Donald Trump’s second impeachment trial kicks off in the Senate next week.
Biden will also be interviewed in his first ever network TV interview since his inauguration in January.
While most tech companies released their results in the last few weeks, there are some tech firms left to update investors, Twitter (TWTR) is reporting Q4 figures on Tuesday.
Eurozone: Germany data, Italian, French and region-wide industrial production
It is looking a little dim on the data side next week in Europe, with the most notable release being the new economic forecasts on Thursday.
The Germany will dominate zone’s economic calendar in the upcoming week, with industrial production on Monday, trade balance on Tuesday and inflation on Wednesday.
The EU’s biggest economy will also feature heavily in Thursday’s EU economic forecasts.
There is also the region-wide SENTIX investor confidence number on Monday, and Italian, French and Eurozone-wide industrial production on Tuesday, Wednesday and Friday respectively.