AstraZeneca PLC, Royal Dutch Shell PLC, Lloyds Banking Group and other banks

Seven of the UK’s 10 biggest blue chip companies report in the coming week, plus four of the five big banks and, across the Atlantic, tech titans including Apple and Alphabet.

With these FTSE 100 giants spread across the global pharma, commodities and consumer goods industries, it is likely to provide a crucial litmus test for the health of the global economy and the direction for equity markets for the coming weeks.

With some Wall Street watchers worrying about a bubble as earnings season rolls round to include two of the world’s largest companies and a Federal Reserve policy statement, it’s undoubtedly a compelling week for finance fans. 

The development of a coronavirus vaccine will probably be an even more important decisive, with PLC () involved in developing one of the leading potential candidates.  

AZ, which has been the largest member of the Footsie since April, reports half-year results on Thursday, a day after rival (), which is currently the third-largest constituent of the London equity benchmark.

In the past week, AZ the University of Oxford reported encouraging data from their clinical trial of a potential coronavirus vaccine, but only the costs of this venture are likely to figure in the first six months of the year. 

Standout elements of the Anglo-Swedish drugs giant’s first quarter back in April were its oncology portfolio, with emerging products such as Tagrisso, Imfinzi and Lynparza registering year on year growth of 56%, 57% and 67% respectively.

After group revenue rose 16%, core earnings per share jumped 27% and reported EPS climbed 17%, AZ’s guidance was maintained for full-year revenue growth of “a high single-digit to a low double-digit percentage”, with core EPS advancing by a “mid- to high-teens percentage”.

Over at GSK, guidance was also unchanged but for a reduction of 1-4% in earnings, as first-quarter sales rose 19% thanks to strong demand for its Shringrix shingles treatment and increased demand for HIV and respiratory products.

Shell shocks over?

There should be no confusing what the key focus of Plc’s () upcoming update – it’s all about the dividend.

Shell shocked the market in April as it cut its dividend for the first time in eight decades, leading it to lose its crown as the most highly valued company in London.

The only question in town that matters then is what will the oil supermajor pay out this time?

“Investors will be looking to see whether the $0.16 payment offered in Q1 is the new normal or not,” said Russ Mould, investment director at AJ Bell.

Analysts on average forecast US$0.66 a share for the full year in 2020, which implies a small increase in the second half.

If Shell does stick to $0.16 a quarter it will still be the third single-biggest dividend payer in the FTSE 100 at just over £4bn, Mould noted, trailing only BP and British American Tobacco.

Beyond dividends, investors will also have an eye out for further writedowns and importantly a new gauge on Shell’s profitability in the current oil price environment.

Banks coronavirus impairments in spotlight

Ahead of interims from four of Britain’s big high street banks, second-quarter earnings from the US banks set a likely tone, with higher provisions for coronavirus loan losses, lower loan margins offset for some by a strong investment banking performance.

The question will be the size of extra COVID-19 impairments for the London-listed lenders after the US main street banks took an additional US$33bn in charges to cover possible bad loans, the highest number since the wake of the (previous) financial crisis.

Encouragingly, in the first quarter, the provisions by Britain’s big five banks of £7.5bn in the first quarter was well below the US$24bn absorbed by their US cousins.

However, as they…