Wednesday preview: Prudential results, Fed rate announcement due

(Sharecast News) - Wednesday sees the release of full-year results from Prudential, half-year results from Softcat and a trading update from Moonpig, while the Bank of Canada and the US Federal Reserve will make their latest policy announcements. As far as Prudential is concerned, Matt Britzman, senior equity analyst at Hargreaves Lansdown, said the company is heading into results having just appointed HSBC veteran, Douglas Flint, as its new chair.

"This was a positive appointment; there had been fears that the next Chair could steer Prudential in a new direction, but Flint's experience in key markets, such as Hong Kong and Singapore, should ease those concerns," he said.

"Underlying operating profit is expected to come in around $3.3bn; investors will be watching that figure, as well as cash generation. First-half results last year showed strong growth in cash generation, a key pillar of Prudential's strategy, which should enable improved shareholder returns. Markets will be watching to see if progress continued over the second half of the year and keeping an eye on guidance for 2026."

For online cards and gifts retailer Moonpig, UBS expects revenue of £376m, up 7.4% year-on-year and adjusted EBITDA of £102m - a 27.1% margin - slightly above the top end of the 25-27% medium term range.

"We expect investors to look for sustained growth in Greetz and any signs of recovery in the Experiences business (especially given the tough macro backdrop)," the bank said. "We also expect any further share buyback to be incrementally positive on shares (£60m share buyback expected to be completed in FY25)."

In terms of central bank policy announcements, Rabobank expects the Bank of Canada to keep the overnight policy rate at 2.25% on Wednesday. "This is the unanimous view amongst Bloomberg surveyed analysts, including ourselves, and is fully priced in by the market," it said.

"The economic environment in Canada, according to the economic data available, is still suffering from elevated inflation and deteriorating activity. However, with the war in Iran and rising energy prices, new risks and fears are emerging."

As for the Fed, it is widely expected to keep the Federal funds rate at 3.50% to 3.75%.

Danske Bank expects chair Jerome Powell to "carefully avoid" giving any strong forward-looking signals and emphasise the two-sided nature of the risks stemming from the energy supply shock.

"Most FOMC participants still see the current policy rate level somewhat above neutral, and once the energy uncertainty eases, we expect the Fed to eventually deliver two more rate cuts in June and September," it said. "Extending uncertainty could push the expected cuts further out into the future but not erase them completely, which we expect to be reflected also in the updated dots."