Fed Chair Jerome Powell's speech and eurozone sentiment data releases will be in focus next week, while policymakers in the UK will be looking for inflation clues in the PMI releases.
Federal Reserve Chair Jerome Powell warned that inflation and economic growth remain too high and interest rates may continue to rise and remain restrictive for longer, while U.S. stocks rebounded and European markets closed slightly higher. Meanwhile, U.S. Trade Representative Katherine Tai highlighted China's dominance in rare earth metals and the vulnerability of U.S. supply chains. Grocery delivery company Instacart filed paperwork for an IPO, and upcoming PCE and jobs data will provide insights into the Fed's rate decisions. Powell's ambiguous remarks at the Jackson Hole symposium led markets to focus on the prospect of a stronger economy rather than interest rate warnings.
Markets are anticipating economic data following Powell's speech, leading to a rise in equities.
Federal Reserve Chair Jerome Powell's recent speech outlined three tests for incoming data to prevent further rate hikes, and the Job Openings and Labor Turnover survey revealed a decrease in job openings, leading to a rise in the S&P 500 and a decline in the 10-year Treasury yield.
The Federal Reserve's preferred measure of inflation, the PCE price index, increased in July, suggesting a higher likelihood of further interest rate hikes this year.
Stocks had a mixed day as investors reacted positively to the latest inflation data, but overall, it has been a challenging month for the equities market. The July personal consumption and expenditures (PCE) index showed a modest increase in consumer spending, while the core PCE remained unchanged. Despite the "disappointing" details, experts expect the Federal Reserve to maintain unchanged interest rates in September. Additionally, tech stocks like Salesforce saw a boost after reporting strong earnings and highlighting their generative AI initiatives.
This week's economic reports, including the Consumer Price Index, Retail Sales, and Consumer Sentiment Index, will provide crucial information for investors and may influence the Federal Reserve's interest rate decision.
The panel discusses the upcoming Fed comments, the market's expectation of no further rate hikes in September, and the impact of high interest rates on jobs, wages, and consumer spending.