U.S. futures were indicating a slightly higher open on Friday, as global stocks largely hovered around the flat line ahead of Federal Reserve Chair Jerome Powell’s hotly-anticipated speech at Jackson Hole.
What are U.S. future indicating?
Dow industrials futures
were pointing up around 100 points
S&P 500 futures
Nasdaq 100 futures
Equities slipped on Thursday as three Fed officials—Robert Kaplan, James Bullard, and Esther George—pushed a hawkish stance on tapering purchases this year. The Dow
fell 192 points on Thursday to close at 35,213, while the S&P 500
declined 0.58% and the Nasdaq Composite
moved 0.64% lower.
What’s driving markets?
Powell’s speech at the Jackson Hole economic symposium at 10:00 a.m. Eastern is the day’s headliner—and has been the most anticipated event all week.
His speech is important because the Fed chair could provide clues as to when the central bank will begin slowing—or tapering—its pandemic-era program of monthly asset purchases, which has added critical liquidity to markets since last year.
But analysts increasingly expect Powell’s speech to lack fireworks.
“Deutsche Bank’s U.S. economists think that the speech will largely mirror his remarks at the July Federal Open Market Committee press conference, and so aren’t expecting a strong signal on the Fed’s September meeting. Instead they think that a tapering announcement will come at the following meeting in early November,” said Henry Allen, an analyst at Deutsche Bank.
Michael Hewson, an analyst at broker CMC Markets, noted that “Powell’s speech may well lay the groundwork for some sort of roadmap to be laid out at the September meeting, with the timing of any decision likely to be dependent on how good next week’s August payrolls report is likely to be.”
Though all eyes will be on Jackson Hole, there’s also a wave of economic data coming down the pipe.
The July core personal consumption expenditures (PCE) price index, which is the Fed’s preferred measure of inflation, is due alongside personal income, consumer spending, and trade in goods for last month, before the University of Michigan August consumer sentiment index.
“There appears to be growing concern amongst a number of Fed officials that inflationary pressures are starting to become much more persistent, with [vice] Fed chair Richard Clarida expressing concern earlier this month that a much more persistent overshoot in the core PCE, would fall under the category of a more than moderate overshoot, which might require some action,” said Hewson.
In Asia, Tokyo’s Nikkei 225
declined 0.36% while the Hong Kong Hang Seng Index
closed 0.03% lower and the Shanghai Composite
In Europe stocks hovered around flat, with London’s FTSE 100
just into the green along with the pan-European Stoxx 600
France’s CAC 40
slipped into the red while Frankfurt’s DAX
remained slightly ahead.