The S&P 500 rebounded last week after three straight losses as traders assess the latest remarks by Federal Reserve Chair Jerome Powell and anticipate official jobs data for August due this Friday.
The Federal Open Market Committee won’t shy away from tightening monetary policy further if required as it seeks to bring inflation down to its 2% target, Powell said Friday in prepared remarks at the Jackson Hole symposium in Wyoming.
“We are prepared to raise rates further if appropriate, and intend to hold policy at a restrictive level until we are confident that inflation is moving sustainably down toward our objective,” Powell said. Outside of a pause in June, the FOMC has increased rates at each of its meetings since March 2022 in a bid to combat inflation.
The Fed chair’s comments, however, were widely anticipated, and some believe the rate-hike cycle is nearing an end. Traders now put the odds of an interest rate increase in September at about 20%, little changed from their stance prior to Powell’s speech.
The University of Michigan Surveys of Consumers Friday showed US consumer sentiment declined more than projected in August as year-ahead inflation expectations edged higher. A weekly report by the Mortgage Bankers Association showed Wednesday that mortgage rates on conforming loan balances reached their highest level since December 2000, dragging loan demand for home purchases to the lowest point since 1995.
Among sectors, technology led the weekly gainers, rising 2.6%. Consumer discretionary was the second-best performer for the week, up 1.1%. Consumer staples slipped 0.8%. Energy posted the steepest decline for the week, down 1.4%.
Some of the major earnings scheduled for this week include UBS Group (UBS), Hewlett Packard (HPE), HP (HPQ), Salesforce (CRM), Dollar General (DG),
On the economic front, this week’s calendar also includes the official second estimate for Q2 US gross domestic product and the consumer spending report for July, along with the Institute for Supply Management’s manufacturing sector report for August. Pending home sales data for July and two key home price reports for June are also slated for next week.
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Episode 170 – The Tax Implications of Moving to America With David Lesperance and Melvin Warshaw