The middle of the week will see the mining sector in view with updates scheduled from a number of blue-chip diggers including Antofagasta and BHP.
Meanwhile, the macro calendar will also be in focus with the latest batch of UK inflation data. The retail price index is tipped to show a 1.9% year-on-year increase, up from 1.4% in February, while the consumer price index is expected to see the inflation rate rise to 1.0% from February’s 0.4%.
Earnings season in the US will also continue to roll on with figures expected from mobile network Verizon, Spotify and exchange operator Nasdaq Inc among others.
Miners unearth updates
Four of the UK’s top listed miners issue updates this week and the omens look good.
Iron ore and copper prices have risen steadily since the start of the year, with iron at its highest for weeks helped by rising steel demand.
Rio Tinto PLC (LON:RIO) and BHP Group PLC (LN:BHP) dominate iron ore shipments from Australia’s Pilbara region, while both jointly own the Escondida copper mine in Chile.
Results have already reflected the improving environment. Rio Tinto posted underlying earnings of US$23.9bn in 2020 and raised its dividend by 26%.
BHP also reported a bumper first half with revenues up by 15% to US$25.6bn, which it accompanied with a massive 55% dividend raise.
Expect more of the same this week, with JP Morgan saying it expects Rio Tinto and BHP to break their previous earnings records this year.
The previous high was in 2011-12, but since then capital spending has been cut back and their operations become much more efficient, which should mean huge cash inflows.
Indeed, “We forecast Rio Tinto (OW) and BHP (OW) will pay the #1 and #2 largest US$ corporate dividends in MSCI Europe index”, the broker said this week.
Of course, the big problems lie outside the numbers with BHP still negotiating over the compensation for the Samarco Dam disaster in Brazil in 2015.
In March, meanwhile, Rio’s chairman Simon Thompson became the latest senior executive to announce he would stand down in the wake of the dynamiting of the aboriginal site at Juukan Gorge in Australia.
Both companies are now flagging up/virtue signalling their ESG efforts and there is likely to be as much emphasis on those as the financial numbers.
Antofagasta (LON:ANTO), which like BHP also reports Wednesday, is another of Chile’s premier copper producers.
The FTSE 100 group posted a better-than-expected increase in underlying profits in 2020 as lower costs and higher copper and gold prices outweighed a decline in production.
The Chilean-based miner was upbeat about copper prices for the current year, something that should show through in the tone of the statement.
Goldman Sachs, this week published an upbeat tome on copper though Antofagasta was not one of its favourites.
The miner has an attractive portfolio of growth options (Los Pelambres, Centinela), but it is still in the investment phase, said Goldman, with potential capital spending of US$4bn (2021-2025) expected to weigh on free cash flow.
Precious metals producer Hochschild Mining PLC (LON:HOC) is also reporting on Wednesday.
Significant announcements for Wednesday April 21:
Trading announcements: Antofagasta PLC (LON:ANTO), BHP Group PLC (LON:BHP), Rio Tinto PLC (LON:RIO), Quilter PLC (LON:QLT), Bunzl PLC (LON:BNZL), Hochschild Mining PLC (LON:HOC)
Finals: Pennant International Group PLC (LON:PEN), Distribution Finance Capital Holdings PLC (LON:DFCH), Wentworth Resources PLC (LON:WEN)
Interims: Carr’s Group PLC (LON:CARR)
Economic data: UK inflation