Business Maverick

Business Maverick

Stocks Pare Gains in Countdown to Jackson Hole: Markets Wrap

Stocks Pare Gains in Countdown to Jackson Hole: Markets Wrap
The Nikkei 225 Stock Average displayed on a rotating-cube screen in an atrium of the Kabuto One building, next the Tokyo Stock Exchange, in Tokyo, Japan, on Tuesday, June 7, 2022. Japan equities were mixed after the yen slid to a 20-year low versus the dollar as the gap between domestic and US yields widened. Photographer: Akio Kon/Bloomberg

Stocks pared gains, with data painting a mixed picture of the economy and traders awaiting a key speech by Federal Reserve Chair Jerome Powell on Friday.

The S&P 500 cut its advance by about half in another session of below-average volume. The Nasdaq 100 outperformed major benchmarks amid a rally in marquee names like Apple Inc. and Amazon.com Inc., though Tesla Inc. whipsawed as its stock split took effect. The dollar fell, while Treasury 10-year yields remained near 3.1%.

The government’s main measures of US growth pointed in different directions in the first half of 2022, data showed Thursday, underpinning further debate on the health of the economy.

Kansas City Fed President Esther George joined the chorus of hawkish policy makers in the run-up to Jackson Hole, telling Bloomberg TV the central bank’s benchmark may have to rise above 4% to defeat inflation. The message has eroded a bounce in stocks and bonds from mid-June troughs. The tension in markets is whether those assets will continue to head back toward the lows of the year.

“Powell is likely to push back on premature expectations of a dovish pivot, reiterating the focus on the fight against high inflation,” said Silvia Dall’Angelo, a senior economist at Federated Hermes Ltd. “Whether markets take him seriously amid an increasingly gloomy outlook for the global economy is yet to be seen.”

Financial conditions have eased since mid-June despite jumbo rate hikes

Sentiment was boosted earlier after China stepped up stimulus with a further 1 trillion yuan ($146 billion) of measures. Traders expect markets to remain volatile as they look to Powell’s comments due Friday at the Jackson Hole meeting for clues on the pace of US monetary tightening.

Crude oil held around $95 a barrel, with elevated energy prices feeding into renewed jitters about whether price pressures have peaked. Natural gas has surged to fresh highs, intensifying an energy crisis that threatens the euro-area economy and hence the global outlook.

Will the meme mania fizzle out? That’s the theme of this week’s MLIV Pulse survey. Click here to participate anonymously.

What to watch this week:

  • Fed Chair Powell speaks at Jackson Hole, Friday
  • US personal income, PCE deflator, University of Michigan consumer sentiment, Friday

Some of the main moves in markets:

Stocks

  • The S&P 500 rose 0.5% as of 11:18 a.m. New York time
  • The Nasdaq 100 rose 0.7%
  • The Dow Jones Industrial Average was little changed
  • The Stoxx Europe 600 rose 0.3%
  • The MSCI World index rose 0.7%

Currencies

  • The Bloomberg Dollar Spot Index fell 0.1%
  • The euro was little changed at $0.9971
  • The British pound rose 0.1% to $1.1815
  • The Japanese yen rose 0.3% to 136.68 per dollar

Bonds

  • The yield on 10-year Treasuries declined two basis points to 3.08%
  • Germany’s 10-year yield declined four basis points to 1.33%
  • Britain’s 10-year yield declined eight basis points to 2.62%

Commodities

  • West Texas Intermediate crude fell 1.1% to $93.86 a barrel
  • Gold futures rose 0.4% to $1,769.20 an ounce
Gallery

Comments - Please in order to comment.

Please peer review 3 community comments before your comment can be posted

X

This article is free to read.

Sign up for free or sign in to continue reading.

Unlike our competitors, we don’t force you to pay to read the news but we do need your email address to make your experience better.


Nearly there! Create a password to finish signing up with us:

Please enter your password or get a sign in link if you’ve forgotten

Open Sesame! Thanks for signing up.

Become a Maverick Insider

This could have been a paywall

On another site this would have been a paywall. Maverick Insider keeps our content free for all.

Become an Insider
Daily Maverick Elections Toolbox

Download the Daily Maverick Elections Toolbox.

+ Your election day questions answered
+ What's different this election
+ Test yourself! Take the quiz