All eyes turn to America’s latest employment numbers

The most significant and very likely market-moving event this week will be the publication of the US Employment Report on Friday. Jerome Powell, the head of the Federal Reserve, has said already that “the time has come” for an interest rate cut this month on the back of easing inflation and a cooling labour market. The August non-farm payroll numbers could indicate whether the cost of borrowing will be lowered by 25 basis points or if a more ambitious 50-basis-point reduction is required.

The main question is whether July’s disappointing 114,000 gain reflected the temporary impact of Hurricane Beryl or was a sign of a genuine labour market cooling. “We suspect it was a bit of both,” economists at Lloyds Bank have said. Lloyds expects a rebound in the new job number of 195,000, above the consensus view of 163,000.

Alongside the non-farm figures, the wage and employment data will be scrutinised closely. Here, Lloyds has pencilled in a 0.3 per cent month-on-month rise in wages and a fall in the jobless rate to 4.2 per cent, from 4.3 per cent in July.

Tomorrow

When Ashtead reports its half-year results, investors will be paying close attention to the outlook on rental revenue growth. The FTSE 100 plant hire group, which has made headlines in recent months over the possibility that it may move its primary listing from London to New York, recorded a 10 per cent increase in rental revenues to $9.6 billion last year, compared with growth of 22 per cent the year before, after it twice downgraded its revenue growth forecasts amid reduced demand from Hollywood film and television studios and a relatively calm wildfires and hurricane season.

Investors will be hoping for no further downgrades to its rental revenue growth forecasts of between 5 per cent and 8 per cent, with double-digit growth in Canada offsetting weaker performance in Britain and America.

Interims Ashtead, Oxford Nanopore, Midwich, STV Group

Trading updates DS Smith, Watches of Switzerland

Wednesday

A trading update in mid-July means investors already know what to expect from Barratt Developments when the housebuilder reports its annual results. The developer built and sold 14,004 flats and houses in the year to the end of June.

Outside of a lockdown-hit 2020, that was its lowest annual output since 2013. Having sold a few more houses over the spring and summer than it had forecast, Barratt expects its annual pre-tax profit to be “slightly ahead” of the £321 million that City analysts had pencilled in (still less than half what it delivered in the previous year).

Of more interest, however, is that this will be the first set of results since Barratt formally completed its acquisition of Redrow last month, which has cemented its position as Britain’s biggest housebuilder.

Barratt was relatively downbeat in its outlook six weeks or so ago, warning that it would build fewer houses again in the year ahead. With Labour working to free up the planning system and the market bouncing back, investors will be hoping for a bit more optimism this time.

Finals Barratt Developments

Interims CAB Payments, Cairn Homes, Direct Line, Eurocell, Hilton Food, Shield Therapeutics

Economy S&P Global UK Services PMI

Thursday

After a bumper set of annual results in March, Lloyd’s of London has a hard act to follow with its half-year figures. Last year was the insurer’s strongest performance since 2007, thanks to rising commercial insurance premiums. Underwriting profits jumped from £2.6 billion in its 2022 financial year to £5.9 billion in 2023. Lloyd’s impressed in the spring, but overall premiums fell shy of a £56 billion revenue target last year, which it blamed in part on not writing as much business as expected in areas such as cyberinsurance.

After UK retail sales and shop prices fell in August, investors in Currys will want to know whether the electronics retailer is still on track for a 10 per cent rise in annual profit. Panmure Liberum remains optimistic: “Sentiment is improving and proof points are starting to appear.” The retailer received a boost on sales of large-screen televisions for the Olympic Games.

Finals Ashmore, Genus

Interims Bakkavor, Funding Circle, International Public Partnerships, Lloyd’s of London, Vistry, WAG

Trading updates Currys, Safestore

Economy SMMT UK monthly car registrations figures

Friday

Economy US employment report, Halifax house price index