Jobs data lowers US rate hike expectations, Asian shares rally on property sector initiatives and Watches of Switzerland directors snap up shares after last month’s sell-off

“Investors are growing warm to the idea that the Federal Reserve might not rush to raise interest rates again at its next meeting. An increase in unemployment for August and lower than expected wage growth suggest the Fed may sit on its hands and make no change to rates,” says Russ Mould, Investment Director at AJ Bell.

“Judging by the messages from US corporates regarding a slowdown in trading, it does feel like we could be at a turning point for monetary policy. Nonetheless, it is impossible to say for certain what the Fed will do, given these are only data points from a brief period of time.

“All but one of the major indices in the US finished Friday ahead of where they started, and that positive sentiment extended to Europe and Asia at the start of the new trading week. The Dax traded 0.4% higher, Shanghai’s SSE index advanced 1.4% and Hong Kong’s Hang Seng moved 2.6% higher.

“Sentiment across Asian markets improved after the weekend vote by creditors in favour of restructuring a bond repayment by troubled Chinese property developer Country Garden. Chinese authorities also lowered downpayment requirements for first and second-time home buyers, thereby providing yet another stimulus initiative to drive greater economic growth.

“In the UK, the FTSE 100 started Monday 0.5% higher at 7,503, led by miners, housebuilders and packaging firms – all economically-sensitive sectors.

“Any sign that interest rates might have peaked is good news, in theory, as it implies consumers and businesses may now have seen the worst when it comes to pressures from an appreciating cost of borrowing. However, existing pressures from current rate levels are still troublesome. One must also consider that any lack of further rate rises might be down to a weakening economy, so it is not a simple ‘no rate hikes = better times’ scenario.”

Watches of Switzerland

“The chief financial officer, chair and two non-executive directors of Watches of Switzerland bought a combined £889,853 worth of shares following last month’s major sell-off.

“The shares slumped after Rolex bought one of Watches of Switzerland’s rivals, raising fears that the acquired business would get preferential treatment with regards to stock and that Rolex now had a channel by which to market direct to consumers.

“Directors buying in unison after a big share price slump can send a positive signal to the market, particularly as they are the ones who should know the business best.”

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