What to know this week in the markets: Jackson Hole, inflation, earnings

What to know this week in the markets: Jackson Hole, inflation, earnings

The attention of the financial world will turn to Grand Teton National Park next week.

The Kansas City Federal Reserve will host its annual economic symposium in Jackson Hole this week, with Fed Chair Jerome Powell’s Friday morning speech expected to highlight the proceedings as investors look for clues about the next move. of the central bank.

This year’s symposium marks Jackson Hole’s first in-person conference since 2019.

A close read of Powell’s comments on Friday will boil down to whether investors see the Fed presidency signaling another 0.75% interest rate hike from the Fed in its next monetary policy announcement on Sept. whether the Fed will slow its pace of rate hikes and raise benchmark rates by 0.50%.

In a note to clients on Friday, Andrew Hunter, senior economist at Capital Economics, wrote that recent economic events will likely set the table for a 0.50% interest rate hike in September.

Inflation data for July showed a modest easing in inflationary pressures, advocating a slowdown in the pace of increases. The July jobs report allayed concerns from some Fed officials that the labor market is softening, perhaps advocating continued aggression over rate hikes.

“As these developments cancel each other out, we still expect the Fed to raise rates by 50 [basis points] next month,” Hunter wrote. “There doesn’t seem to be much need for President Jerome Powell to adjust expectations when he speaks at Jackson Hole next Friday.”

Powell’s speech will be released at 10 am ET on Friday and, for the first time, the Fed Chairman’s speech – seen as the central bank’s most important communication of the year – will be broadcast live. Brian Cheung of Yahoo Finance will be in Wyoming to bring readers and viewers full coverage of the events.

Federal Reserve Chairman Jerome Powell and Bank of England Governor Mark Carney speak over the three days

Federal Reserve Chair Jerome Powell and then Bank of England Governor Mark Carney speak during the three-day “Challenges for Monetary Policy” conference in Jackson Hole, Wyoming, USA, Aug. 23, 2019. REUTERS/ Jonathan Crosby

In addition to Powell’s speech, updates on service sector activity, inflation and consumer sentiment will be on the economic calendar. PCE inflation – the Fed’s preferred measure – is due to be released at 8:30 am ET on Friday, just 90 minutes before Powell’s speech. Powell’s speech will begin concurrently with the release of the University of Michigan’s latest consumer sentiment index.

For Fed Watchers, next week will hardly offer a summer Friday.

While earnings season is largely over, this week’s results will still provide investors with key updates, with reports from Nvidia (NVDA), salesforce.com (CRM), Ulta Beauty (ULTA) and dollar store operators Dollar Tree. (DLTR ) and Dollar General (DG) — the most notable releases of the week.

Last week’s results from Walmart (WMT) and Target (TGT) helped allay some investor fears about the state of the consumer, with those results being better than feared. However, reports from both companies signaled a more cautious approach on the part of buyers as inflationary pressures eased during the summer months.

Walmart CFO John David Rainey told Yahoo Finance last week that the company saw customers trade lower — particularly in supermarkets — during the quarter. Rainey also told analysts on a conference call that the company has canceled billions in orders.

In May, Dollar Tree and Dollar General offered some of the first indications that consumers were using their purchases as an opportunity to cut costs. Results from both retailers this week will be analyzed for signs of ongoing, modified or accelerated behavioral changes.

Signs are seen at a Dollar Tree store in Mount Rainier, Maryland, USA, on June 1, 2021. REUTERS/Erin Scott

Signs are seen at a Dollar Tree store in Mount Rainier, Maryland, USA, on June 1, 2021. REUTERS/Erin Scott

Nvidia’s latest report also comes at a pivotal time for the semiconductor industry, often seen as an indicator of global economic demand. Earlier this month, Nvidia warned that its quarterly results would miss estimates, and this week’s reports cataloged growing concerns around demand in the chip space as global economic activity appears to soften.

Last week, markets closed out a four-week winning streak, with the high-tech Nasdaq down more than 2% and the S&P 500 down more than 1%.

This loss of momentum in the summer market rally came as the last leg of the meme’s stock trading fizzled, with Bed Bath & Beyond (BBBY) shares falling 40% on Friday after GameStop (GME) chairman ) Ryan Cohen disclosed that he had sold his entire 11.8% position in the struggling retailer.

Cohen’s sale also came as Bloomberg reported on Thursday that Bed Bath & Beyond had hired Kirkland & Ellis, a law firm known for its restructuring and bankruptcy work. After the close on Friday, Bloomberg reported that some Bed Bath & Beyond suppliers had stopped shipping due to unpaid bills by the retailer.

While the collapse in Bed Bath & Beyond shares served as the most flashy move, the past week also saw several of this summer’s “losers turned winners” with the likes of Peloton (PTON), Robinhood (HOOD) and Coinbase (COIN) all falling over 13% for the week.

economic calendar

Monday: Chicago Fed National Activity IndexJuly (-0.19 previously)

Tuesday: S&P Global US Manufacturing PMIAugust preliminary (51.9 expected, 52.2 previously); S&P Global US Services PMIAugust preliminary (50 expected, 47.3 previously); Richmond Fed Manufacturing IndexAugust (-5 expected, 0 previously); new house salesJuly (-2.5% expected, -8.1% expected)

Wednesday: MBA mortgage applications; Durable goods ordersJuly (+0.8% expected, +2% previously); Durable goods orders excluding shippingJuly (+0.2% expected; +0.4% previously); Pending home salesJuly (-2% expected, -8.6% previously)

Thursday: Initial unemployment claims (252,000 expected, 250,000 previously); second quarter GDPsecond estimate (-0.8% expected; -0.9% previously); Kansas City Fed Manufacturing ActivityAugust (13 previously)

Friday: personal incomeJuly (+0.6% expected, +0.6% previously); Personal expensesJuly (+0.5% expected, +1.1% previously); entire inventoriesJuly (+1.4% expected, +1.8% previously); retail stocksJuly (+2% previously); PCE, month by monthJuly (+0.1% expected, 1% previously); PCE, year by yearJuly (+6.4% expected, +6.8% previously); Core PCE, month by monthJuly (+0.3% expected, +0.6% previously); Core PCE, year by yearJuly (+4.7% expected; +4.8% previously); University of Michigan Consumer SentimentAugust (55.3 expected, 55.1 previously)

earnings calendar

Monday: Enlargement (ZM), Nordson (NDSN), Palo Alto networks (PANW)

Tuesday: Medtronic (MDT), JM Smucker (SJM), JD.com (JD), intention (INTO), Advanced auto parts (AAP)

Wednesday: splunk (SPK), NetApp (NTAP), Autodesk (ADSK), salesforce. with (CRM), Nvidia (NVDA)

Thursday: dollar tree (DLTR), General Dollar (GD), Work day (DAY), marvel Technology (MRVL), last Beauty (ULTA)

Friday: There are no big gains set for release.

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