Tuesday preview: UK GDP, US durable goods orders, BP's third quarter

UK gross domestic product data on Tuesday is expected to show economic growth slowed in the third quarter compared to the previous three months.

Analysts estimate GDP eased to 0.6% in the third quarter from 0.7% in the second quarter. However, on a year-on-year comparison, growth is forecast to remain at 2.4%.

“The UK economy is expected by many observers, including the Bank of England, to have slowed somewhat, but the exact extent is a matter of intense interest,” said Monex Europe.

“If tomorrow’s data are well short of expectations and the outlook for the future deteriorates significantly, a complete overhaul of monetary policy could ensue.”

Meanwhile, the US will see a batch of data including durable goods orders, consumer confidence, the S&P Shiller Composite on house prices, and the services purchasing managers’ index.

US durable goods are estimated to fall 1.3% in September, following a 2.3% drop a month earlier.

The consumer confidence index is projected to hold at 103 in October.

The S&P Shiller 20-City Composite Home Price Index is forecast to rise to 5.10% year-on-year in August compared to 4.96% a month earlier.

Markit’s PMI on US services is expected to rise slightly to 55.2 in October from 55.1 in September, above the 50 level that indicates expansion in the industry.

The Federal Reserve is taking a range of economic releases into account in determining the timing of its first interest rate hike in nearly a decade. The Fed will announce its latest policy decision on Wednesday but many analysts expect the central bank to keep rates unchanged.

On the company front, BP releases its third quarter results on Tuesday with investors likely to focus on how the group has coped with lower oil prices.

The recent quarter has seen the lowest average price for oil, so both year-on-year and quarter-on-quarter comparisons are likely to be affected, though there should be higher production in some expansion projects.

"Investors should look out for reserves replacement levels as well as commentary surrounding their Rosneft investment,” said Graham Spooner, Share Centre analyst.

Spooner added that the market is likely to hear less about the 2010 Gulf of Mexico disaster as it is now well in the past. The analyst lists BP as a ‘buy’.

Tuesday 27 October

INTERIMS
Bloomsbury Publishing

INTERIM DIVIDEND PAYMENT DATE
Smith & Nephew

INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Consumer Confidence (US) (15:00)
M3 Money Supply (EU) (09:00)

Q3
BP

GMS
Randall & Quilter Investment Holdings (DI)

FINALS
Utilitywise plc

EGMS
VinaCapital Vietnam Opportunity Fund Ltd.

AGMS
Brooks Macdonald Group, Clinigen Group, Indus Gas Ltd., Medilink-Global UK Ltd.

TRADING ANNOUNCEMENTS
Shoe Zone

UK ECONOMIC ANNOUNCEMENTS
GDP (Preliminary) (09:30)
Index of Services (09:30)