Market participants will focus their attention on the latest policy announcement from the US Federal Reserve on Wednesday as they look for further clues on tapering.
ING said a no change decision looks a foregone conclusion.
“The Fed funds target range will be kept at 0-0.25% and monthly asset purchases maintained at $120bn per month despite decent activity data and elevated inflation readings that are running at double the Fed’s 2% target,” it said.
As far is tapering is concerned, ING said that with Covid cases seemingly peaking out and the jobs market being more constrained by a lack of workers than any softness in demand, the QE taper announcement will come in November.
“For now, the most we can expect is cautious optimism in the statement with a bit more explicit support for tapering this year from Jerome Powell’s press conference. We also expect to hear it emphasised that this decision is completely separate from any decision to hike rates – there is no automatic path to higher interest rates.”
On the UK corporate front, meanwhile, full-year results are due from Imperial Leather maker PZ Cussons.
Russ Mould, investment director at AJ Bell, said that after an 18-month period blighted by a global viral outbreak it would seem sensible to expect a maker of hand gels and soaps to be doing well.
“That is the case, at least up to a point, at PZ Cussons, the owner of Carex hand gels, Imperial Leather soaps and St Tropez tanning products, as the shares are up by 50% from their March 2020 lows.
“However, troubles in an important market, Nigeria, a period of underinvestment and uninspired marketing have cost these names some lustre and the company’s net profit (before exceptional items) slumped from a peak of £85m in the year to May 2014 to £47m in the 12 months to May 2020.”
Mould noted that management is looking to improve performance in Nigeria, where a complex business structure has exacerbated the problems presented by oil price volatility, recession and devaluations of the local currency, the naira.
“Self-help will be the order of the day as PZ Cussons again focuses on core brands, in this case Premier Joy, Morning Fresh and Cussons Baby,” he said.
“July’s trading update suggested the plan was at least off to a good start as Mr Myers revealed: Annual sales growth of 7% on a constant currency basis as all regions and each of Hygiene, Baby and Beauty showed higher revenues. On a stated basis analysts are expecting full-year revenues of £612m, up from £587m last year.
“Adjusted pre-tax profit would exceed the prevailing consensus of £63m to £64m and the £62m earned in the year to May 2020.
“Analysts will look to those numbers and also any guidance that PZ Cussons feels able to give for the year to May 2022. At the moment, the consensus analysts’ forecasts are looking for a 1% increase in stated sales to £619m and a 5% increase in underlying pre-tax profit to around £67m.
“The combination of the robust balance sheet and double-digit operating margins should mean PZ Cussons can once more pay a final dividend.”
Wednesday 22 September
INTERIMS
Deepmatter Group, ECSC Group, IGas Energy, Oxford Biomedica, Pennant International Group, Quixant, Strix Group , Ten Entertainment Group , The Mission Group, Trellus Health, WANdisco
INTERIM DIVIDEND PAYMENT DATE
Hiscox Limited (DI), OSB Group
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Crude Oil Inventories (US) (15:30)
Existing Home Sales (US) (15:00)
MBA Mortgage Applications (US) (12:00)
FINALS
PZ Cussons
AGMS
Babcock International Group, Civitas Social Housing , IG Group Holdings, Ilika, Miton UK Microcap Trust, Odyssean Investment Trust, Seed Innovations Limited, Shearwater Group , SRT Marine Systems, Stanley Gibbons Group, Studio Retail Group , Worsley Investors Limited NPV
FINAL DIVIDEND PAYMENT DATE
Kinovo
