Wednesday preview: Yellen testifies before House Financial Services Committee

Federal Reserve chair Janet Yellen testifies before the House Financial Services Committee on Wednesday, a week after the US central bank announced its latest policy decision.

The hearing will focus on the Fed’s supervision of major banks. However, investors will be closely watching as Yellen may be asked about the central bank’s outlook for interest rates and the economy.

The Federal Open Market Committee last Wednesday said it would be leaving interest rates at between 0.25% to 0.50% but signalled that the case for an increase later this year has strengthened.

The Fed said inflation was on track to reach the 2% target and near-term risks were “balanced” but it would keep interest rates unchanged until it sees further evidence of progress toward its objectives.

Meanwhile, the US will on Wednesday also see the release of the all-important durable goods orders report, a key gauge of health of the manufacturing industry.

The Energy Information Administration releases its US weekly crude inventories data, which has the tendency to move oil prices amid worries about the global supply glut.

On the corporate calendar, Smiths Group reports its full year results with analysts expecting a drop in pre-tax profit to £421m from £463m the previous year.

In a trading update in August the diversified engineering business warned that operating profit is expected to be “below 2015 levels”, reflecting a drop in profits at its John Crane business, which services customers in the troubled energy services sector.

Revenues, on the other hand, are forecast to be higher than the previous year, supported by a stronger US dollar and a robust operational performance in the Smiths Detection business.

Numis said the focus of the results will be on the “stabilisation of John Crane given its oil and gas exposure, growth in Medical, which has underperformed in recent years, and recovery in the Detection business, including development of the order book”.

“Cash will inevitably be key as will the ongoing asbestos and other liabilities where we expect little change. With currency benefits into 2017 we expect forecasts to be maintained or even upped marginally.”

The broker also expects management to provide further thoughts on the shape of the group and opportunities going forward.

Wednesday 28 September

INTERIMS
AA , Ebiquity, Inspiration Healthcare Group , Public Power GDR SA (Reg S), Redt Energy , Venn Life Sciences Holdings, Volga Gas

INTERIM DIVIDEND PAYMENT DATE
British American Tobacco, Lloyds Banking Group

QUARTERLY PAYMENT DATE
UIL Limited (DI)

INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Crude Oil Inventories (US) (15:30)
Durable Goods Orders (US) (13:30)
GFK Consumer Confidence (GER) (07:00)
MBA Mortgage Applications (US) (12:00)

FINALS
Clinigen Group, Mysale Group, Smiths Group

SPECIAL DIVIDEND PAYMENT DATE
Hargreaves Lansdown

EGMS
Acencia Debt Strategies Ltd.

AGMS
Fulcrum Utility Services Ltd. (DI), Infrastructure India, PZ Cussons, Zoo Digital Group

FINAL DIVIDEND PAYMENT DATE
Gateley (Holdings) , Hargreaves Lansdown, ICBC Standard Bank, WYG