Stocks fluctuated between daily gains and losses throughout the week as investors awaited the latest updates from the Federal Reserve. In his Friday speech at Jackson Hole, Fed Chair Jerome Powell did indeed affirm expectations of an impending monetary policy pivot. Powell said that “the time has come for policy to adjust,” adding that “the timing and pace of rate cuts will depend on incoming data.”
Stocks jumped up after the policy path was announced. The Dow Jones Industrial Average (DJIA) rose 1.27% on the week, now standing less than 0.1% from its record close. The S&P 500 (SPX) added 1.45%, reaching 0.6% below its all-time high. The tech benchmarks Nasdaq Composite (NDAQ) and Nasdaq-100 (NDX) closed the week with gains of 1.40% and 1.09%, respectively.
Powell’s speech did not provide details regarding the extent and pace of the coming monetary easing. However, analysts interpreted the familiar “data-dependency” tune as the central bank’s intention to focus on the developments in the labor market. Therefore, market participants will closely follow the data reflecting the current state of the economy and the macroeconomic outlook.
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.
» Q2 2024 GDP Growth Annualized (second estimate) – Thursday, 08/29 – This report will provide a further insight into a change in GDP in the previous quarter, incorporating updated data received after the initial estimate was released. The second update is expected to show no change from the initial estimate of 2.8% annualized growth rate.
» July’s Core Personal Consumption Expenditures (Core PCE) – Friday, 08/30 – This report reflects the average amount of money consumers spend monthly, excluding seasonally volatile products such as food and energy. FOMC policymakers use the annual Core PCE Price Index as their primary inflation gauge.
» August’s Michigan Consumer Sentiment Index and UoM 5-year Consumer Inflation Expectations – Friday, 08/30 – These reports portray the results of a monthly survey of consumer confidence levels and consumers’ views of long-term inflation in the United States. The level of confidence affects consumer spending, which contributes about 70% of the U.S. GDP. The inflation expectations index is used as a component of the Fed’s Index of Inflation Expectations calculations.
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