European markets have opened mixed with the SMI in Switzerland underperforming, while other indices are trading in the green. It follows a weak performance overnight in Asia amid ongoing concerns about China’s economy and a disappointing session on Wall Street last night with the Nasdaq shedding over 1.8%. All eyes turn to Fed chair Jay Powell’s address at Jackson Hole later today.
UK CONSUMER CONFIDENCE
The GfK UK consumer confidence index hit -25 versus -30 in July, the biggest one-month rise since April. However the reading still came in below the long-run average of -10. Expectations towards households’ financial situation over the coming year hit -3, up from -7 and higher than -31 logged last year.
High inflation, rising interest rates and the cost-of-living crisis have been weighing on consumer sentiment. But with the end of the rate-hiking cycle in sight and with inflation starting to show signs of cooling, in an encouraging sign, sentiment is beginning to pick up.
GfK said “while the financial pulse of the nation is still weak, these signs of optimism are welcome”.
WATCHES OF SWITZERLAND
Rolex is acquiring luxury watch retailer Bucherer for an undisclosed amount. Bucherer will continue to sell other watch brands. This could cause issues for other Rolex official retailers such as Watches of Switzerland Group (LSE:WOSG) and The Hour Glass Ltd (SGX:AGS).
Reflecting this concern, shares in Watches of Switzerland have plunged today, down over 26%, suffering their biggest one-day drop on record to hit December 2020 lows. The tie-up between Burcherer and Rolex could solidify its ties at the expense of Watches of Switzerland, potentially diminishing its relevance in the market for sales of second-hand Rolex watches. Rolex is a highly popular brand with demand sharply outweighing supply. High end customers and the luxury market have proven to be highly resilient to the broader macroeconomic and cost-of-living pressures this year.
Earlier this month, Watches of Switzerland maintained its full-year guidance and said demand for luxury watches remains robust.
These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.
Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.