M&S, Barratt and US jobs report on the agenda for Friday

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The end of the first full week of 2021 brings updates from retailer Marks and Spencer Group PLC (LON:MKS), housebuilder Barratt Developments PLC (LON:BDEV) and the always closely watched US non-farm payrolls data.

Friday’s jobs report, which is expected to show a smaller increase in new jobs for December, may fade into relative insignificance compared to political and pandemic events.

“The big question for the markets going forwards is whether they can sustain their New Year optimism in the face of increasingly tough covid-19 headlines, both from a medical and economic standpoint,” said market analyst Connor Campbell at Spreadex.

“In that regard, Friday may give investors some difficulty, if the nonfarm jobs report forecasts are anything to go by.”

Analyst Naeem Aslam at Avatrade added that the market had seemed to ignore other macroeconomic events amid the historic events on Capitol Hill.

“One thing which traders should pay attention to is that the US job market has taken a serious U-turn, and it is only a matter of time before it reaches the peak of the Covid level,” Aslam added.

He said the chances are that Friday’s number is going to be pretty weak after a succession of soft weekly jobless claims figures, which remains a big concern for the Federal Reserve, with some members seeing the potential need for continued quantitative easing and keeping interest rates as they are for the foreseeable future.

M&S has had mixed lockdowns

Marks & Sparks will report on trading over the festive period in what will be a third-quarter update for the FTSE 250-listed retailer, which has been in the news this week as it is reportedly close to a rescue deal for clothing brand Jaeger.

House broker Shore Capital said the closure of stores due to the pandemic will continue to negatively impact C&H sales, so like-for-like sales are likely to be down by nearly 30%, with food LFL sales marginally higher year-on-year.  

The previous times we heard from the group were in December when it said it was not going to pay back business rates to the government, unlike the pure grocery groups, and another update to say that its stores would not open on Boxing Day.

Back in November, M&S slumped to the first ever loss in its 94 years, as the pandemic led to a half-year loss before tax of £17mln, though this was nowhere near as bad as the market had feared.

This was because of the strong numbers from its online grocery joint venture with Ocado Group PLC (LON:OCDO).

At the time of the interims, management also said it was planning a reorganisation of its store estate, its online channel and its clothing & home division, with the partial aim of saving £115mln of costs per year.

Barratt eyed for housing market situation

Housebuilder Barratt Developments PLC (LON:BDEV) will issue an update on Friday, January 8, with investors likely to watch for any comment on how the recent lockdown measures have affected the company’s construction activity as well as any impact on its order numbers.

Shareholders will also be interested in the company’s outlook for the year ahead, particularly with the UK’s stamp duty holiday due to come to an end shortly which may impact buying activity across the market.

In an update in mid-October, Barratt noted that assuming no further national lockdowns took place, private sales should total between 14,500 and 15,000 homes in the year to June 2021 with around a further 650 completions from joint ventures. However, seeing as the last few months have seen ever more restrictive lockdown measures brought in to contain the spread of COVID-19, investors will be seeing if this forecast can be maintained.

Significant events expected on Friday January 8:

Trading announcements: Barratt Developments PLC (LON:BDEV)

Finals: Intermediate Capital Group PLC (LON:ICP)

Economic data: UK Halifax house prices, US non-farm payrolls

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