Tech momentum on Wall Street ahead of Jackson Hole

Moderate optimism seems to prevail among the ranks of investors in the American market, in anticipation of tomorrow’s speech by central banker Jerome Powell.

The indices are trying to rebuild upward momentum on yesterday’s small gains that broke the three-day losing streak, having on their side today also some positive macroeconomic messages that downgrade to a certain extent the concerns about an upcoming recession.

In this climate, the industrialist Dow Jones is enhanced by 0.4% and moves on 33,086 unitsthe enlarged S&P 500 rises by 0.8% and is located at 4,173 unitsas does the tech-weighted Nasdaq which trades at 12,556 units with +1%.

Capitalization behemoths are still at the “helm” today, with 4 of the so-called “Big Tech”, Amazon, Apple, Alphabet, Meta, all increasing by more than 1%.

Boeing’s title jumped 2.2% and Dow Inc’s +2% are trying to boost the Dow Jones, while pressure is exerted by Salesforce, which dives more than 6% after downgrading its guidance for the year.

As mentioned above, investors’ eyes are now on the Kansas City Fed conference in Jackson Hole, Wyoming, where US Federal Reserve Chairman Jerome Powell is scheduled to speak tomorrow, amid uncertainty over the Fed’s stance on subsequent increases in its interest rates.

July’s rally, which lifted US benchmarks out of bear market territory, was largely fueled by investors’ interpretation of Powell’s comments following the latest 75bp rate hike. that the bank will now slow down.

Something that has been increasingly questioned lately, with investors hoping to get some fresh clues from the head of the world’s most powerful central bank.

“People are gradually coming back into the market on the basis that a lot of the bad news has already been priced in,” said Brian Vendig, president of MJP Wealth Advisors.

“Investors will be really anxious to hear whether or not the Fed will remain blind to raising interest rates and fighting inflation at the expense of economic growth,” he adds.

Liz Young, chief investment strategist at SoFi, reckons “the market is trying to decide if we’re in the middle or the end of the cycle, and it’s sending some mixed messages. We’re expecting news tomorrow on Jerome Powell’s speech and we’re kind of stuck with no clear tone of direction”.

For his part, however, the president of the Federal Reserve Bank of Atlanta, Rafael Bostic, said today that he has not yet decided whether the Fed should raise interest rates by 50 basis points or 75 points.

In a similar vein, Kansas City Federal Reserve President Esther George warned today that it is still too early to tell whether the slowdown in inflation in July is the start of a broader trend in prices.

Macro news was otherwise positive today, as a revised estimate of second-quarter GDP showed a smaller contraction than initially reported, while new jobless claims fell to a six-month low.

Specifically, US GDP fell 0.6% in the previous quarter, instead of a previously reported 0.9%, while analysts had expected the revised reading to show a decline of 0.8%.

Meanwhile, 243,000 new jobless claims were filed in the week ended August 20, down 2,000 from the week before, while analysts had expected an increase of 252,000.