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What Is The Road Out Of Lockdown 3.0?

Published 21/02/2021, 07:22
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Investors will find out more about the path out of Lockdown 3.0 in the UK, while in the US the Dow Jones is still chasing fresh highs.

UK

Monday is going to be a big one for the UK markets. It is the date when Boris Johnson’s government is set to reveal how the country will exit the current set of covid-19 restrictions in light of the successes of the vaccine rollout.

A lot of information is already out there, suggesting the easing will start with schools reopening on March 8th. That then is likely going to be followed by the reopening of non-essential shops in March or April, some holiday lets in April, pubs and restaurants in May and then, by the summer, staycations. Essentially, the country will be gradually moving down through the tier system put in place in the latter stages of 2020.

It’s all very vague, so what investors (and the nation) will want from Johnson is some firming up of the timeline. Though hard dates might be difficult to announce – every step is going to be contingent on Covid-19 case numbers continuing to fall.

Aside from the lockdown press conference, the UK is pretty quiet data-wise, with the exception of Tuesday’s jobs report. The claimant count change reading will be the most influential figure, covering the month of January, while the average earnings index and unemployment rate numbers will be for December.

In terms of corporate updates, it is another notable week for the FTSE 100 and FTSE 250. Monday has Primark-owner Associated British Foods PLC (LON:ABF), which finds itself in the fairly novel position of its food division outperforming its clothing brand.

Tuesday sees HSBC joined by Croda International PLC (LON:CRDA) and InterContinental Hotels Group PLC (LON:IHG), the latter of which is likely facing an ugly update.

The latest update from Lloyds (LON:LLOY) is on Wednesday, with a congested Thursday then including Anglo American (LON:AAL), BAE Systems (LON:BAES), Centrica (LON:CNA), Mondi (LON:MNDI) and Standard Chartered (LON:STAN). Things wrap up on Friday, finally, with Essentra PLC (LON:ESNT) and Rightmove PLC (LON:RMV).

US

As February comes to a close, the Dow Jones Industrial Average is still is in the running for a record high every time the bell rings on Wall Street.

But the markets are going to need to start seeing speedier stimulus updates if that momentum is to be maintained.

The latter stages of the week are expected to bring the floor vote in the House – and then it’s off to the Senate.

One of the big questions around the bill is the minimum wage, with a couple of Democrat senators opposed to raising it to $15 an hour. Given that just one lost vote would cause the bill to crumble via the budget conciliation method in the Senate, the markets would do well to keep an eye on how the issue is amended.

As for data, the CB consumer confidence number is on Tuesday, with new home sales on Wednesday.

Thursday has the 2nd look at Q4 GDP – which initial estimates showed at 4.0% at the annualised rate – alongside durable goods orders and jobless claims, while Friday sees the core PCE price index, personal spending, Chicago PMI and revised consumer sentiment readings.

Eurozone

The Eurozone has something to offer every day this week. Monday sees the German Ifo business climates numbers, Tuesday the region-wide final inflation figure for January, Wednesday the final German Q4 GDP reading, Thursday the German Gfk consumer climate data, and Friday the French Q4 GDP estimates.

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