Investors are experiencing another bout of angst over the health of the US economy, creating a chilly feel in the markets.
Spirits are low after Friday’s disappointing US employment report, which showed that fewer jobs were created last month than hoped.
Non-farm payrolls rose by just 142,000 in August, while the payrolls for June and July were slashed, leaving traders fretting that the US jobs market – and the wider economy – was cooling.
In better news, the unemployment rate dipped to 4.2% – but the report overall has left investors baffled as to how the US Federal Reserve will react. An interest rate cut later this month feels inked in – but will it be a gentle quarter-percentage point (25 basis points) reduction, or a dramatic half-point cut?
Instinctively, investors would like a larger cut in borrowing costs – except, if that happens, it implies the Fed has serious concerns over the health of the US economy.
On Friday, the US S&P 500 share index fell by 1.7%, while the tech-focused Nasdaq Composite tumbled by 2.5%.
This has knocked Asia-Pacific markets today, where China’s main stock indices are down over 1%, the Hong Kong Hang Seng is down almost 2%, and the South Korean Kospi index is off 0.7%.
Disappointing economic growth figures from Japan have added to the gloom; Japan’s Q2 GDP growth rate has been revised down to an annualised rate of 2.9% for April-June, down from a preliminary estimate of 3.1%.
Japan’s Nikkei began the session with a 3% drop, but actually managed to claw its way back to finish 0.5% lower.European markets, which fell on Friday, are set for a slightly higher open.
Meanwhile, Aldi is to open a further 23 stores this year after profits more than doubled last year to almost £537m.
The supermarket has just announced it would invest £800m in the UK market through the rest of this year including opening 23 more stores, and had signed a £750m deal with Kent-based grower AC Goatham & Son including establishing the first "Aldi orchard" on a 200-acre plot on New Green Farm in Gravesend dedicated to growing fruit for the chain.
The supermarket – which opened about 30 stores last year – said sales increased 16% to £17.9bn in 2023, its highest ever period of sales growth.
However, since then sales growth has slowed as all the traditional grocers, including Tesco and Sainsbury’s, have introduced schemes to price match Aldi on key items. The group will open about 30 stores again this year in total, down from about 50 per annum in the years before 2023.
Aldi, which currently has more than 1,000 stores, has previously announced plans to scale to 1,500 stores across the UK.
The retailer, which aims to be the cheapest in the UK, said it had invested almost £100m in over 300 price cuts in the last three months on items including fish goujons, chicken breasts, potatoes and basmati rice.
Giles Hurley, the chief executive of Aldi UK and Ireland, said:“For every £1 of profit generated last year, we’re investing £2 this year - opening more stores and building the supply infrastructure to bring high-quality, affordable groceries to millions more families the length and breadth of Britain.”
The agenda
• 9.30am BST: TUC Annual congress in Brighton
• 9.30am BST: Sentix survey of eurozone investor confidence
We’ll be tracking all the main events throughout the day ...
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