Must read: UK GDP, Entain, Persimmon

UK GDP 

Victoria Scholar, Head of Investment, interactive investor says, “Next week brings the latest UK growth figures on Thursday morning.  

The preliminary GDP data is expected to show modest growth of around 0.1% in the second quarter, down from 0.7% in the first quarter. 

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The focus will also be on June’s monthly reading, which is seen coming in roughly flat, a slight rebound from the unexpected decline of 0.1% in May and a drop of 0.3% in April. 

After a strong start to the year when the UK was crowned the fastest growing G7 economy in Q1, recent weaknesses in the data paint a much gloomier picture. Plus there is also a risk that the impressive growth seen in the first three months could be revised lower. After cutting rates, the Bank of England said this week that underlying UK GDP growth has remained subdued, highlighting ‘downside domestic and geopolitical risks’. 

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Recent figures suggest that the UK economy is stuttering – this week’s S&P Global Construction PMI in July posted its steepest drop since May 2020, a recent survey from Deloitte found that UK consumer sentiment had its biggest contraction in nearly three years, the UK’s official inflation rate unexpectedly jumped to 3.6% in June and the latest unemployment rate hit a four-year high. 

The UK is buckling under the pressure from global trade instability, a slowing UK labour market, above-target inflation and a fiscal blackhole that increases the chances of higher taxes in the Autumn Budget.”

ENTAIN 

Richard Hunter, Head of Markets, interactive investor says, “Entain (LSE:ENT) will deliver its interim results on Tuesday 12th August. Expectations will be high, with recent news having led to a doubling of the share price over the last 12 months, including a gain of 46% this calendar year alone.

The group’s gamble to conquer overseas markets in addition to its core UK offering is showing signs of paying off. A recent update revealed that its joint venture with BetMGM had recently become earnings positive, although it has been a tough slog for the group to get to this stage, where promotional investment has been something of a necessary headwind.”

PERSIMMON 

Richard Hunter, Head of Markets, interactive investor says, “Persimmon (LSE:PSN) will announce its half-year results on Wednesday 13th August. It had a decent first quarter and remains the preferred play within the sector, but the group is still up against a number of factors outside its control.

It remains to be seen whether the momentum has continued into the half-year results, or whether slowing construction activity and mortgage availability concerns remain uppermost.

Even so, the group should eventually benefit from the extreme supply and demand imbalance in the UK, while government reforms should also prove to be a tailwind. In the meantime, the group’s order book and land bank remain particular strengths, although these have not been sufficient to prevent a share price decline of 22% over the last year.”