No respite from Jackson Holes for stock markets
2023-08-22
Summary:
Jackson Hole's annual symposium by Kansas City Fed will captivate investors as global central bankers speak.
Jackson Hole for the Kansas City Fed’s annual symposium will obviously draw investors’ attention this week with top central bankers from around the world delivering speeches.
Most FOMC members still cautioned about significant upside risks to inflation at last meeting, which upset markets in hope of an end of tightening sooner than later.
Price and wage pressures begins to dissipate but labour market and consumer spending have to slow further to convince policymakers of a veer towards economic stimulus.
Powell is expected to reiterate the need to hold interest rates higher for longer, so equity and bond can hardly find any relief. The S&P 500 slumped 3.2% in the week following Powell’s remarks at Jackson Hole last year.
Stocks posted its first three-week slide since February, weighed down by higher US rates and China’s economic woes.
More than 25 million put options traded on US exchanges on Thursday, the most since the banking tumult in March – a sign of profitability jitters amid increasing uncertainties.
Meanwhile, call buying to open a position has dropped to the lowest level this year relative to puts to open a position, according to Citigroup.
A crucial earnings report Wednesday from Nvidia will set the tone for markets as the company valued at a PEG of around 5 needs to justify expectations for AI to boost earnings.
Disclaimer: Investment involves risk. The content of this article is not an investment advice and does not constitute any offer or solicitation to offer or recommendation of any investment product.
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