This week ahead || Aug 19th - Aug 23rd 2024
Here's your news for the weel ahead.
All eyes on the Fed at Jackson Hole amid market rebound: What to know this week
The past week saw a strong rally in U.S. stocks, with the S&P 500 gaining nearly 4%, the Nasdaq Composite rising over 5.2%, and the Dow Jones Industrial Average increasing almost 3%. As attention shifts to the Federal Reserve, investors will closely watch Chair Jerome Powell's upcoming speech at the Jackson Hole Symposium for clues on potential interest rate cuts in 2024. Despite a quieter week ahead for economic data, Powell's remarks could significantly influence market expectations. Last week's data helped ease recession fears, showing that inflation continues to move toward the Fed's 2% target while consumer spending remains strong and layoffs are stable, bolstering confidence in a potential "soft landing" for the U.S. economy. Meanwhile, retail earnings from companies like Lowe's, Target, and Macy's will remain in focus. Market sentiment, which had been volatile, has now balanced out, with tech stocks leading the recovery. Citi projects the S&P 500 to reach 5,800 by year-end, noting the growing appeal of growth stocks, particularly in the tech sector, following the recent pullback.
What we know (and don't) about Kamala Harris's economic plan
Vice President Kamala Harris laid out her economic plans in a speech Friday, focusing on housing costs, grocery prices, and healthcare, marking her first major policy address since announcing her presidential run. Harris praised President Biden's accomplishments but acknowledged that many Americans still struggle with daily costs, promising to prioritize middle-class opportunities and a stable business environment. Her proposals include expanding the child tax credit to $6,000 for a newborn's first year, a $25,000 first-time homebuyer credit, and new efforts to curb healthcare costs, such as capping insulin prices and accelerating Medicare drug price negotiations. Harris also criticized Donald Trump's tariff plans, calling them a "national sales tax," and proposed measures to combat food "price gouging." While Harris emphasized addressing immediate cost-of-living issues, critics noted that key aspects of her economic agenda, including tax policies and energy strategies, remain undefined. As she continues to outline her vision, Harris aims to address these areas, while maintaining a focus on issues that resonate with swing-state voters.
Top 5 things to watch in markets in the week ahead
The upcoming week in the markets is expected to be eventful, with key developments that could significantly influence financial trends. One of the most anticipated events is Federal Reserve Chair Jerome Powell's speech at the Jackson Hole economic symposium on Friday, where markets will be closely watching for signals regarding the pace and timing of potential interest rate cuts. Earlier in the week, the Democratic National Convention will kick off in Chicago, where Vice President Kamala Harris will work to solidify her presidential candidacy. Global PMI data, to be released on Thursday, will provide insights into economic strength, particularly in light of recent signs of a slowdown and inflation pressures. Additionally, energy markets are likely to remain volatile amid geopolitical tensions, with concerns over supply disruptions in the Middle East and uncertainties about demand from China. These events will be pivotal in shaping market expectations and strategies for the coming weeks.
Strategists explain why falling inflation won't help stocks anymore
On Wednesday, the stock market had a mixed session as investors reacted to the latest Consumer Price Index (CPI) data. The S&P 500 gained 0.38%, driven by an initial rally after headline inflation fell below 3% for the first time since 2021. However, enthusiasm waned as core CPI remained above the Federal Reserve's 2% target, leading to cautious trading. Sector performance was varied, with financials leading due to strong earnings, while concerns over potential regulatory actions against Alphabet and upcoming retail earnings weighed on communications and consumer discretionary sectors. The market now focuses on upcoming economic growth data and Federal Reserve policy for future direction.
