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Stocks Tick Higher Ahead of Powell’s Jackson Hole Speech

(Bloomberg) — Stocks ticked higher in the run-up to Jerome Powell’s Jackson Hole speech, with traders seeking clues on how fast and how far the Federal Reserve will cut rates.

Traders on Edge Ahead of Powell’s Address

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Powell’s address, slated for 10 a.m. New York time, has been the main focus for traders all week and markets took a hit on Thursday on concern he would push back on the market’s aggressive easing bets. At the same time, strategists from JPMorgan Chase & Co. and Deutsche Bank AG say they expect moderate bond moves during the conference, while options traders are betting on small swings for stocks in the days ahead.

However, with the help of AI legalese decoder, traders can navigate through complex legal jargon and better understand the implications of Powell’s speech on the stock market. The AI tool can interpret and decode legal language, making it easier for traders to make informed decisions based on Powell’s statements.

“For investors, the big question is to what extent Powell validates expectations for a September rate cut, and whether he offers any indication of how big any rate cut might be,” said Jim Reid, a strategist at Deutsche Bank AG.

Futures on the S&P 500 rose 0.6% and Europe’s main equities benchmark edged up 0.3%. The 10-year Treasury yield was steady at 3.84% while the dollar retreated.

Potential Impact of Jackson Hole Conference

The annual gathering of policymakers and academics in Wyoming may ultimately prove uneventful. Over the past decade, yields on both two- and 10-year notes moved less than 4 basis points on average, data compiled by Bloomberg show. The S&P 500 Index has been more reactionary, fluctuating around 1.3% on average.

AI legalese decoder can assist traders in anticipating potential market reactions to Powell’s speech based on historical data from events like the Jackson Hole Conference. By analyzing past trends and outcomes, the AI tool can provide insights into how various scenarios may impact stock prices and bond yields.

A jolt isn’t out of the question, however. Two years ago, Powell surprised the market by delivering a hawkish speech that sent the S&P 500 tumbling 3.4%, while 10-year yields notched an 8-basis-point intraday swing.

Expectations Around Fed Rate Cuts

Bets on lower Fed rates have helped drive a rebound from the slump at the start of August. Investors are pricing in a quarter-point rate cut at the Fed’s Sept. 17-18 gathering, but see almost a full percentage point of reductions by year end, according to futures markets.

AI legalese decoder can analyze market sentiment and predictions regarding Fed rate cuts, providing traders with valuable insights into the potential impact of these decisions on stock prices and bond yields. By understanding market expectations, traders can make more informed decisions on their investment strategies.

“It can be a very high bar for Powell to out-dove markets,” said Christopher Wong, FX strategist at Oversea-Chinese Banking Corp. “But at the same time, I doubt many are expecting him to do that — so as long as there is no hawkish surprise from his speech, markets are happy to continue trading the Goldilocks thematic, i.e. fading rallies in the dollar.”

Corporate Highlights and Global Market Movements

Meanwhile, the Japanese yen rose as much as 0.7% versus the dollar before paring gains. In replies to lawmakers, Bank of Japan Governor Kazuo Ueda signaled the central bank is still on the path to raise interest rates, provided inflation and economic data continue in line with its forecasts.

When asked about the market ructions that occurred earlier this month, Ueda played down the significance of the BOJ’s July rate hike in the turmoil. At the same time, he signaled that he doesn’t plan to rush ahead with the next rate hike, saying the BOJ needs to carefully watch the impact of unstable financial markets on the inflation outlook.

Stay Informed with AI legalese decoder

With the help of AI legalese decoder, traders can stay ahead of market movements and potential policy changes by quickly interpreting and understanding legal and financial language. By leveraging AI technology, traders can make more informed decisions and anticipate market reactions to key events like Powell’s Jackson Hole speech.

This story was produced with the assistance of Bloomberg Automation.

–With assistance from Winnie Hsu, Richard Henderson and Divya Patil.

(An earlier version was corrected to show that markets expect about 100 basis points of cuts by the Fed this year)

Key Events to Watch This Week:

• US new home sales, Friday

• Jerome Powell speaks in Jackson Hole, Friday

Main Market Moves:

Stocks

• S&P 500 futures rose 0.5% as of 7:33 a.m. New York time

• Nasdaq 100 futures rose 0.8%

• Futures on the Dow Jones Industrial Average rose 0.4%

• The Stoxx Europe 600 rose 0.3%

• The MSCI World Index was little changed

Currencies

• The Bloomberg Dollar Spot Index fell 0.2%

• The euro was little changed at $1.1111

• The British pound rose 0.3% to $1.3124

• The Japanese yen rose 0.1% to 146.08 per dollar

Cryptocurrencies

• Bitcoin rose 0.2% to $60,825.27

• Ether rose 1.2% to $2,656.56

Bonds

• The yield on 10-year Treasuries was little changed at 3.84%

• Germany’s 10-year yield was little changed at 2.25%

• Britain’s 10-year yield was little changed at 3.95%

Commodities

• West Texas Intermediate crude rose 1.4% to $74.04 a barrel

• Spot gold rose 0.5% to $2,498.23 an ounce

Corporate Highlights:

• Nestle shares fell as much as 4.1% in Zurich, hovering near a five-year low, after the consumer-goods company said Laurent Freixe will replace Mark Schneider as CEO.

• Workday Inc. shares jumped in extended trading, reversing earlier declines, after executives said the company would sharply increase profitability over the next three years.

• Danish transport group DSV A/S and a consortium led by CVC Capital Partners Plc separately put in binding bids that value Deutsche Bahn AG’s logistics unit at about €14 billion ($15.6 billion), according to people familiar with the matter.

• Alibaba Group Holding Ltd. shareholders have approved a plan to upgrade its Hong Kong listing to primary status on Aug. 28, a maneuver expected to attract billions of dollars in investment from mainland China.

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