Amid strong trading on Wall Street and signs of a de-escalation in the trade war between the US and China, the FTSE 100 closed 2.4% higher on Thursday at 7,199.50.
On Monday (9 April) the British Retail Consortium posts its latest data on UK retail sales (see Economic update). Next Wednesday (11 April) sees monthly UK manufacturing figures released. Later in the day US inflation numbers published as well as minutes from the last meeting of the Federal Reserve when interest rates were hiked. Both announcements could offer some insight into the pace of future rate increases in the remainder of the year. In the early hours of Friday (13 April) Chinese trade numbers are expected ahead of a University of Michigan report on US consumer sentiment.
UK construction output contracted for the first time in six months as ‘The Beast from the East’ hit business activity and civil engineering work. IHS Markit’s Purchasing Managers’ Index dropped sharply from 51.4 in February to 47 in March. A reading of over 50 suggests growth while one under 50 implies contraction. UK-listed construction stocks have suffered a weak performance following underwhelming construction output data over the last few months. Out of all UK construction stocks with a market cap of over £300 million, less than a third of these companies would have made investors any money over the last six months in share price terms. The best performing stock over this period was Ibstock (IBST). It has been increasing capacity as UK brick demand is currently exceeding supply.
Costain (COST) and Forterra (FORT) made smaller gains. Among the weakest performers over the last half year is Kier (KIE), following the fall-out from the collapse of Carillion. Also suffering were Morgan Sindall (MGNS) and CRH (CRH).
Did Storm Emma and the Beast from the east give people another reason to shun the shops in March? Investors can find out whether the cold weather affected UK retail sales when the British Retail Consortium reveals the latest data for March on Monday (9 April). In February, retail sales rose by 1.6%. Retailers hoping for a boost from the Easter Bank Holiday may have been disappointed thanks to continuing poor weather.
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9 April – Video game services provider Keywords Studios (KWS:AIM) reports its 2017 full year results amid high expectations. The company has already stated its revenue and profits will be comfortably ahead of analyst forecasts, but as other highly rated growth stocks have seen, the slightest wrinkle in the results or outlook could have a big negative impact on the share price. Keywords made 11 acquisitions in 2017, taking its total since IPO up to 27. It has further cash available for more acquisitions.
10 April - Small cap oil and gas firm Serica Energy (SQZ:AIM) is set to announce its 2017 results next week. The focus is likely to be less on the numbers themselves and more on the performance of the collection of fields it is acquiring from BP (BP.). Look for an update that the £300 million transaction is on schedule to complete in the third quarter as planned. Once it has gone through, Serica’s production is projected to increase seven-fold to 21,000 barrels of oil equivalent per day, 85% of which will be natural gas.
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