The US market continues to look for direction today, with investors moving cautiously as the days approach for central banker Jay Powell’s speech at the Fed conference in Jackson Hole.
In particular, all three indicators show subtle changes and changes of signs. The Dow Jones at 32,905 points with -0.01%, the S&P 500 at 4,130 points with +0.04% and the Nasdaq at 12,390 points with +0.11%.
The Dow and S&P 500 were down for a third session in a row yesterday, albeit on relatively limited volume, and the tech-weighted Nasdaq Composite finished around unchanged, with upward momentum clearly showing that it has weakened.
Tellingly, after rallying over 9% in July, the S&P 500 is essentially unchanged for the month.
A catalyst for the market’s next move is likely to be the Fed’s annual three-day conference in Jackson Hole, Wyoming, which begins tomorrow Thursday, while central banker Jay Powell’s speech is scheduled for Friday.
The bullish reaction in July was largely based on the majority of investors’ interpretation of Powell’s statements after the latest giant rate hike of 75 basis points, that the Fed intends to slow down its monetary policy tightening.
After all, in recent weeks bets on Fed rate futures have been swinging between the possibility of another brutal 75 basis point hike or a softer 50bp.
“Markets will remain in cloudy waters until Powell’s speech in Jackson Hole on Friday,” said Edward Moya, senior analyst at Oanda.
According to him, the central banker “may struggle to convince markets that he is comfortable with tightening policy that will cause a recession. The economy is clearly slowing, but it is still too early for the Fed to signal that it is less aggressive in its politics”.
For his part, renowned economist Mohamed El Erian said yesterday that Jerome Powell has an opportunity to bring investors on board with the Fed’s agenda to reduce inflation.
“Chairman Powell has two choices: either he’s going to let this disconnect continue, or he’s going to try to fix it. And if he tries to fix it, he’s either going to defy the market’s expectations, or he’s going to admit that the market is right because he’s going to we have a significant economic slowdown. It’s up to him,” he said.
Elsewhere in stock action today, Boeing is trying to boost the Dow Jones with a 2% jump, while most of the large-cap index is trading under 0.5%.
Under pressure are Walgreens Boots Alliance, down 1.44%, Cisco down 1% and Intel down -0.9%.
In tech, Zoom is up more than 2%, Tesla more than 1.5%, Netflix is at +1.4%, while Google parent Alphabet loses 0.5%
Finally, in macro news for the day, new orders for capital goods in the US rose in July, albeit at a slower pace than in previous months.
Specifically, orders for capital goods, excluding aircraft, rose 0.4 percent in July, after rising 0.9 percent in June, according to government data. The average estimate of analysts in a Reuters poll was for a 0.3% increase in July.
Durable goods orders were unchanged in July from the previous month, defying analysts who had expected them to ease.
Source: Capital
I am Sophia william, author of World Stock Market. I have a degree in journalism from the University of Missouri and I have worked as a reporter for several news websites. I have a passion for writing and informing people about the latest news and events happening in the world. I strive to be accurate and unbiased in my reporting, and I hope to provide readers with valuable information that they can use to make informed decisions.
