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Banks and big pharma key company news for Wednesday, US GDP eyed

The mid-point of the week will bring more updates from the UKs major banks, as well as updates from the pharmaceutical sector and retail.

Barclays PLC (LON:BARC) is forecast to remain profitable despite taking £1bn of impairments according to UBS, where analysts are also anticipating its investment bank will see £600mln of mark-to-market losses in the first quarter.

For Standard Chartered PLC (LON:STAN), UBS forecasts revenues and pre-provision profits to be down only slightly, with ongoing loan losses of US$416mln.

On the macro front, US GDP will be the major news for Wednesday, with economists at ING expecting the US economy will have contracted 6% on an annualised basis in the first quarter with much worse to come in the second, with a 40% annualised fall in output eyed between March and June “even if other US states follow the lead of Georgia, Tennessee, Florida and South Carolina and start re-opening their economies in the next two to four weeks”.

Meanwhile, the Federal Reserves meeting “is likely to be met with much less fanfare than usual”, says RBC Capital Markets, as the central bank has been operating in “real-time” during the crisis.

Pharmaceutical giants joint frontline of coronavirus vaccine effort

The mid-point of the week will bring first quarter updates from two of the UKs pharmaceutical heavyweights, GlaxoSmithKline PLC (LON:GSK) and AstraZeneca PLC (LON:AZN).

AZ has been one of the bright spots during the pandemic, with its shares having hit an all-time high on 21 April as it combines its nature as a defensive stock with its place at the forefront of efforts to find a vaccine for the coronavirus through its partnership with other pharmaceuticals groups.

However, investors are likely to focus on these efforts as a cost burden rather than potential new earnings, and with profits being a priority in these times positive news from the companys Chinese expansion and its new drug sales is likely to be eyed more closely.

Analysts at UBS are estimating the firm will report a quarterly core operating profit of US$1.6bn with revenues of US$5.9bn.

For GSK, its shares are also likely to hold up well as a defensive investment, however, shareholders are likely to be more concerned about any disruption to the companys operations at its research and manufacturing sites around the world.

The company is also joining AstraZeneca in the frontline for a coronavirus vaccine, although investors are likely to know that such a project may not be profitable.

Beyond coronavirus, attention is likely to be drawn to sales of the companys new drugs as well as any updates from its research & development portfolio.

UBS is forecasting earnings per share of around 33p for the quarter.

Next to update on restarted operations

Next PLC (LON:NXT) is publishing a trading announcement on Wednesday where investors expect weekly sales performance.

Shops of the fashion retailer have been closed since the beginning of the UK lockdown in March, while online operations were shuttered until 14 April.

The FTSE 100-listed firm kept a limit on orders to ensure safety measures at its warehouses, so analysts are wondering what these limits may be and whether it will expand from childrensRead More – Source
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