Stock markets locked in their best week since November, snapping a streak of four weeks of declines. The Dow Jones Industrial Average (DJIA) rose 2.94%, while the S&P 500 (SPX) jumped by 3.93%. Tech shares regained their lead, with the tech benchmarks Nasdaq Composite (NDAQ) and Nasdaq-100 (NDX) surging by 5.29% and 5.38%, respectively.
After the previous weeks’ sell-off, which was led by investor fears over the odds of a hard landing, new data reflecting consumer strength and falling inflation brought back the “Goldilocks” economic scenario, encouraging market participants. A resurgence of economic optimism emboldened “dip buyers,” specifically in the technology sphere.
This week will bring the release of the Federal Open Market Committee (FOMC) meeting minutes from the Fed’s last policy meeting three weeks ago. Although these minutes are important, the headline event will be Fed Chair Jerome Powell’s speech at the annual Jackson Hole symposium.
Powell is expected to lay the foundation for the impending monetary policy easing, supported by the data revealing a softening job market and the deceleration of inflation toward the central bank’s target. With the first interest-rate cut since March 2020 almost a certainty for September’s meeting, the main topic of discussion on Wall Street is now the pace of the easing process.
Three Economic Events
Here are three economic events that could affect your portfolio this week. For a full listing of additional economic events, check out the TipRanks Economic Calendar.
Notably, the only traditional (aka numerical) data points in focus this week will be flash PMIs, with two others being the FOMC minutes and Powell’s Jackson Hole speech.
» Federal Open Market Committee (FOMC) minutes – Wednesday, 8/21 – Minutes of the Federal Reserve’s latest policy meeting, published three weeks after the day of the policy decision, offer an in-depth account of the Fed policy outlook and include succinct information on the committee members’ positions on monetary policy, as well as their individual opinions about the economic situation and trend.
» August’s S&P Global Manufacturing and Services PMIs (preliminary) – Thursday, 8/22 – These reports show business conditions in the most important U.S. economic sectors, providing a significant indication of the overall economic conditions. They are used by policymakers and analysts as forward-looking indicators reflecting trends in the overall economy.
» Jerome Powell’s Speech at the Jackson Hole Economic Policy Symposium – Friday, 8/23 – The annual global forum for central bankers, policy experts, and academics in Jackson Hole, Wyoming, has been hosted by the Federal Reserve Bank of Kansas City since 1978. The Federal Reserve Chair’s speech is expected to set the stage for a rate reduction in September. But since the markets have already fully priced this in, the emphasis will instead be on how much the rate will drop in September and beyond.
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