The FTSE 100 slipped on Tuesday as traders returned to their desks after the summer break and awaited fresh catalysts for equities.
That catalyst could come later this week from the Non-Farm Payrolls – the last jobs report before the Federal Reserve meets to decide on interest rates towards the end of September.
Non-Farm Payrolls are always eagerly anticipated, but August’s reading is particularly important given the volatility that followed July’s jobs report. There have also been downward revisions to prior jobs reports so a weak figure suggesting weakness in the US could send waves through global equities.
There is a feeling of nervousness among traders as we move into September with US and UK stocks near record highs. In recent years, September has brought severe bouts of volatility and with the concerns that sparked a sharp, yet brief, sell off in early August still rumbling in the back ground, some analysts are cautioning we could be in for a bumpy ride this month.
“There are some tough seasonal trends ahead, as September has historically been a poor month for the S&P 500,” said Matt Britzman, senior equity analyst, Hargreaves Lansdown.
“Couple that with political and geopolitical uncertainty, and investors are likely in for a choppy month. US non-farm payroll figures on Friday are the highlight of the week, which could have a meaningful impact on the size of the first Fed cut later this month.”
Investors were provided with some UK data to consider in Retail sales and Barclaycard spending data, although this barely moved the dial.
Ashtead was among the top risers after the plant hire group announced positive first-quarter results that suggested the group could be turning a corner after a period of soggy growth.
“Sometimes when a company has been under pressure it’s enough that things haven’t got any worse. That has proved to be the case with Ashtead’s latest quarterly results,” said Russ Mould, investment director at AJ Bell.
“While the three-month period could hardly be characterised as stellar, the equipment hire company is sticking with its full-year forecasts.
“Ashtead has been able to eke out some growth and the hit to profit is largely linked to lower levels of used equipment sales, which is not its core business.”
The negative impact of soft Chinese data over the weekend was still evident in UK stocks on Tuesday, with miners Rio Tinto and Antofagasta lingering at the bottom of the leaderboard.
Rightmove was the top faller as investors booked profits after its shares spiked due to a potential takeover.