Skip to main content

News | Business | Equity Markets | Markets Wavers: Markets waver as traders look to Jackson Hole meeting

Naomi Rovnick and Hudson Lockett 



Equity markets weakened on Thursday after a previous day of strong gains, as investors took bets off the table ahead of a key meeting of central bankers.
Leading central bankers hold their annual gathering — usually held at the Rocky Mountain resort of Jackson Hole but online this year — over the next two days.
After presiding over huge stimulus packages to soothe the economic damage wrought by the coronavirus pandemic, they have a dwindling arsenal of monetary tools to use, although investors expect Federal Reserve chairman Jay Powell to signal that US policy, which sets the tone for much of the rest of the world, should remain supportive to holders of financial assets. He is due to speak at 9.10am New York time (2.10pm London).
“While we expect the Fed to shy away from more radical easing measures, such as explicit controls on government bond yields, we believe Powell will probably outline other dovish measures,” said Mark Haefele, chief investment officer at UBS Global Wealth Management.
After Wall Street’s S&P 500 rose another 1 per cent to a fresh record high in the previous session, these gains did not look set to be repeated on Thursday. Futures contracts signalled the S&P 500 could fall 0.2 per cent in opening trades.
The Europe Stoxx 600 lost 0.3 per cent and London’s FTSE 100 shed 0.4 per cent, as currencies also exhibited few signs of decisive trading. The dollar, as measured against a basket of trading partners’ currencies, hovered near a one-week low, having shed almost 6 per cent of its value so far this year. The euro remained flat against the dollar, buying $1.1828.
Investors remain concerned over the widening gap between equities and the performance of many global economies, as Covid-19 cases have risen and earlier signs of recovery have petered out.
At the Jackson Hole meeting, the Fed’s Mr Powell is expected to provide details on the central bank’s review of monetary policy and offer some guidance over future inflation targeting. Economists mostly believe that the US economy cannot attain a healthy level of price rises by itself, leading to speculation that the Fed may unveil policies designed to stimulate inflation.
Achieving a moderate level of price rises, perhaps by nudging consumer and business expectations for them higher, may not be negative for equity markets, Vanguard investment strategist Andrew Patterson said.
“The equity market is looking for some sort of higher inflation policy,” he said. “Not the high single or even double digits of the 1970s and 1980s,” set to inflict pain on investors, “but a moderate level that is normally linked to a reasonably healthy economy.”
Despite mounting speculation the Fed chairman could signal a move into average inflation targeting in his Friday speech, US government debt prices traded steadily. The yield on the 10-year US Treasury note, which moves inversely to prices, was flat at 0.69 per cent, having touched 0.721 per cent in the previous session. But bond investors also inched into European government debt, with the yield on Germany’s 10-year Bund falling 0.03 percentage points to minus 0.44 per cent.
Japan’s Topix index dropped 0.5 per cent while Hong Kong’s benchmark Hang Seng fell 1 per cent. China’s CSI 300 index of Shanghai and Shenzhen-listed stocks slipped 0.4 per cent.
Commodities prices did not react strongly to the prospect of Hurricane Laura, a category four storm that is approaching Texas and Louisiana, racing into the heart of the US oil industry. Brent crude, the international oil benchmark, traded 0.2 per cent higher at $45.72 a barrel.

Comments

Popular posts from this blog

Analysis | The Cybersecurity 202: How the shutdown could make it harder for the government to retain cybersecurity talent

By Joseph Marks 13-17 minutes THE KEY President Trump delivers an address about border security amid a partial government shutdown on Jan. 8. (Carolyn Kaster/AP) The partial government shutdown that's now in its 18th day is putting key cyber policy priorities on hold and leaving vital operations to a bare bones staff. But the far greater long-term danger may be the blow to government cyber defenders' morale, former officials warn. With the prospect of better pay and greater job security in the private sector, more government cyber operators are likely to decamp to industry, those former officials tell me, and the smartest cybersecurity graduates will look to industry rather than government to hone their skills. That’s especially dangerous, they say, considering the government’s struggle to recruit and retain skilled workers amid a nationwide shortage of cybersecurity talent. About 20 percent of staffers are furloughed at the De

Democrats call for investigation into Trump’s iPhone use after a report that China is listening:Analysis | The Daily 202 I The Washington Post.

washingtonpost.com By James Hohmann _________________________________________________________________________________ President Trump and Chinese President Xi Jinping visit the Great Hall of the People in Beijing last November. (Andrew Harnik/AP) With Breanne Deppisch and Joanie Greve THE BIG IDEA: If Democrats win the House in two weeks, it’s a safe bet that one of the oversight hearings they schedule for early next year would focus on President Trump’s use of unsecured cellphones. The matter would not likely be pursued with anywhere near the gusto that congressional Republicans investigated Hillary Clinton’s use of a private email server during her time as secretary of state. Leaders of the minority party have higher priorities . But Democratic lawmakers made clear Thursday morning that they will not ignore a New York Times report that Trump has refused to stop using iPhones in the White House, despite repeated warnings from U.S. intelligence offici

RTTNews: Morning Market Briefing.-Weekly Jobless Claims Edge Down To 444,000. May 13th 2010

Morning Market Briefing Thu May 13 09:01 2010   Commentary May 13, 2010 Stocks Poised For Lackluster Open Amid Mixed Market Sentiment - U.S. Commentary Stocks are on pace for a mixed start to Thursday's session, as a mostly upbeat jobs report continued to relieve the markets while some consternation regarding the European debt crisis remained on traders' minds. The major index futures are little changed, with the Dow futures down by 4 points. Full Article Economic News May 13, 2010 Weekly Jobless Claims Edge Down To 444,000 First-time claims for unemployment benefits showed another modest decrease in the week ended May 8th, according to a report released by the Labor Department on Thursday, although the number of claims exceeded estimates due to an upward revision to the previous week's data. Full Article May 13, 2010 Malaysia's Decade High Growth Triggers Policy Tightening Malaysia's economy grew at the fastest pace in a decade in