The major indices of the U.S. New York stock market are showing mixed trends in early trading on Monday, the 21st (local time), ahead of key events scheduled for this week, including Nvidia's earnings announcement and the Jackson Hole meeting.
At around 10:28 a.m. at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average, composed of blue-chip stocks, was trading at around 34,351, down 149.14 points (0.43%) from the previous session. Meanwhile, the S&P 500, which focuses on large-cap stocks, was up 3.02 points (0.07%) at 4,372, and the tech-heavy Nasdaq was up 71.09 points (0.53%) at 13,361.
Currently, within the S&P 500, technology, consumer discretionary, and communication-related stocks are rising. On the other hand, utilities, real estate, and energy sectors are declining. Palo Alto Networks is up more than 15% after reporting improved quarterly earnings following the market close on the 18th. VMware jumped nearly 5% after Broadcom announced it had received acquisition approval from UK competition authorities. Nvidia, which is set to announce earnings this week, is up about 4.5% as HSBC maintains a buy rating. Tesla also rose more than 5%. Conversely, Johnson & Johnson fell over 2%, weighing on the Dow index.
Investors are closely watching the final corporate earnings reports and recent sharp movements in Treasury yields while awaiting major events scheduled for this week. From the 24th to the 26th, the economic symposium known as the Jackson Hole meeting will be held in Wyoming, USA. It will be attended by Federal Reserve (Fed) Chair Jerome Powell, European Central Bank (ECB) President Christine Lagarde, central bank governors from various countries, senior officials, and leading economists. Notably, Chair Powell will deliver an economic outlook speech starting at 10:05 a.m. Eastern Time on the second day, the 25th. Given concerns about inflation and economic slowdown, and that the monetary policy is entering the final phase of the tightening cycle, the market impact will likely depend heavily on the tone of Powell’s remarks. Last year, Powell’s unexpectedly hawkish comments triggered a sharp sell-off in the New York stock market.
This year, Powell is expected to reaffirm his previous stance that high interest rates may persist for a longer period, reminding markets of ongoing inflation concerns. However, his comments are likely to remain ambiguous, leaving both the possibility of a pause and a rate hike open. No hints about the September FOMC meeting are expected. Anna Wong, an economist at Bloomberg Economics, recently noted, "Powell is likely to adopt a more balanced tone, signaling the end of the tightening cycle while emphasizing the need to keep rates elevated for an extended period." David Kelly, Chief Global Strategist at JP Morgan Asset Management, described Powell’s speech as "a good start, more balanced than hawkish." Besides the Fed, the monetary policy directions of the ECB and the Bank of Japan (BOJ) are also key points to watch at this Jackson Hole forum.
This week also features speeches from prominent dovish Fed officials such as Thomas Barkin, President of the Richmond Fed, and Austan Goolsbee, President of the Chicago Fed. On the 23rd, the August S&P Global Manufacturing PMI will be released, with attention on whether it will remain below the baseline of 50 for the fourth consecutive month. Additionally, weak economic data and concerns over defaults among real estate companies in China continue to pressure investor sentiment. The People’s Bank of China has effectively lowered the loan prime rate (LPR), which serves as a benchmark interest rate, by 0.1 percentage points to 3.45%.
Corporate earnings announcements are also nearing their end. Nvidia, a key beneficiary of the artificial intelligence (AI) rally, is expected to provide positive momentum to the recently sluggish New York stock market. Most Wall Street analysts anticipate that Nvidia’s Q2 earnings, to be announced after market close on the 23rd, will exceed market expectations and that Nvidia’s stock price will rise further. Major retailers such as Macy’s, Nordstrom, Kohl’s, and Dollar Tree will also release earnings reports.
In the New York bond market, the benchmark 10-year Treasury yield rose to around 4.34%. The 10-year yield has been climbing recently due to mixed factors including expectations for a soft landing, concerns over prolonged Fed tightening, and increased Treasury issuance. The 2-year yield, which is sensitive to monetary policy, also rose to about 4.99%. The dollar index, which measures the value of the U.S. dollar against six major currencies, is steady around 103.4.
European stock markets are rising in a narrow range. Germany’s DAX index is trading up about 0.25% from the previous session. The UK’s FTSE index is up 0.02%, and France’s CAC index has gained 0.51%.
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