Cautious moves on Wall ahead of Powell’s Jackson Hole speech

Wall Street’s main indexes are moving with small fluctuations and mixed signs, in anticipation of the speech of the chairman of the Federal Reserve, Jerome Powell, at the economic symposium in Jackson Hole. At the same time, investors weighed the decline in the personal consumption expenditure index – the Fed’s preferred gauge of inflation – which rekindled hopes that inflation had peaked and begun to slow, giving room to the US central bank to moderate its rate hikes.

Particularly, the price index for personal consumption expenditures fell 0.1% in July from the previous month, while the structural index – excluding energy and food – rose just 0.1%, according to data announced today by the US Commerce Department.

It is noted that in June from May, the index had jumped 1%, while on a structural basis it had strengthened by 0.6%. A slowdown is also recorded in the 12 months, with the annual index slowing to 6.3% in July from 6.8% the previous month and the structural index to 4.6% from 4.8%.

Investors are waiting for her Powell’s speech in the afternoon to derive new data on the course of monetary policy in the coming months. Some hopes that the U.S. central bank will moderate its rate hikes to protect the economy have been dashed in recent days by statements from senior officials who pointed out that inflation remains particularly high and it is still too early to say for sure whether has started to slow down.

Against this background, analysts expect the Fed chairman to adopt an aggressive stance in his speech today, confirming that the bank’s main objective is to bring inflation to the 2% target, regardless of the impact on the economy.

However, position in favor of a milder increase in Fed interest rates took the member of the D.D. of and head of the Atlanta branch, Rafael Bostic, shortly after the PCE figures. Swith his statements, R. Bostic said that “I’m leaning towards 50 basis points for September”, pointing out, however, that “there are still data that we expect to see before the September meeting”.

However, as R. Bostic pointed out, the structural index of personal spending (which increased by just 0.1% in August moving to 4.6% year-on-year), the economy appears to be responding to the Fed’s rate hike, with the same adding that “we have to be careful not to overreact.”

At other times of the day, the initial data announced in the US for the country’s commercial transactions showed a decline of 9.7% in the trade deficit in July to $89.1 billion from $98.6 billion the previous month.

Meanwhile, the yield on the 10-year government bond of the US strengthened by 3.5 basis points to 3.061%, while the 2-year remained stable at 3.36%.

Indicators – Statistics

On the board, the industrialist Dow marginally gains less than 0.1% to 33,310 points, while the broader S&P 500 moves down by 0.15% to 4,190 units and the technologically weighted Nasdaq records losses of 0.25% at 12,600 units.

From the 30th shares of the industrial index, 18 move with a positive sign and 12 with a negative sign. The biggest gains are recorded by Boeing at +0.7% and Dow Inc and JPMorgan which exceed +0.5%. At the bottom are Intel losing 0.78% and IBM at -0.56%.

Electronics Arts stock added more than 4% after reports that Amazon.com plans to announce a takeover bid for the video game maker. Gap posted a 2.9% gain after its sales beat Wall Street expectations.

Dell plunges 8% after earnings beat analysts’ estimates.