New York Stock Market Mixed Near Flat Ahead of Powell's Jackson Hole Speech

8 Consecutive Trading Days of Gains Followed by Pause
Focus on Jackson Hole Meeting
September Rate Cut Confirmed...Cut Size Is Key

The three major indices of the U.S. New York stock market showed mixed movements around the opening on the 20th (local time). Investors are adopting a cautious stance as they watch the upcoming Jackson Hole meeting this week.

[Image source=EPA Yonhap News]

As of 9:41 a.m. in the New York stock market, the Dow Jones Industrial Average, centered on blue-chip stocks, is trading at 40,866.54, down 0.07% from the previous trading day. The S&P 500 index, focused on large-cap stocks, is up 0.06% at 5,611.72, and the Nasdaq index, centered on technology stocks, is up 0.02% at 17,880.95.

The New York stock market extended its longest winning streak this year the previous day. Early this month, fears of a recession caused by rising unemployment rates were alleviated, leading the S&P 500 and Nasdaq indices to rise for eight consecutive trading days. Last week, the recovery rally continued as persistent inflation slowdown was confirmed and retail sales data also showed strength.

Investors are focusing on the speech by Jerome Powell, Chair of the U.S. Federal Reserve (Fed), scheduled for the 23rd. The Jackson Hole meeting, an annual economic policy symposium attended by central bank officials from major countries, will be held over three days starting on the 22nd in Wyoming. The market is expected to seek hints about the Fed’s interest rate decisions at the September Federal Open Market Committee (FOMC) meeting through Powell’s speech.

Investors are taking a rate cut in September as a given. According to the Chicago Mercantile Exchange (CME) FedWatch, the federal funds futures market is fully pricing in a Fed rate cut of at least 0.25 percentage points in September.

Sam Stovall, Chief Investment Strategist at CFRA Research, said, "The issue is not when the Fed will cut rates, but how much they will cut." He added, "Fed officials want to signal that they are at the peak, not behind the curve." He also noted, "At the same time, they do not want to be too aggressive in removing pressure before the fire is out," suggesting that the rate cut might be limited.

Before the Jackson Hole meeting, investors will also be able to check Fed officials’ views on current monetary policy through the July FOMC minutes to be released on the 21st. On the 22nd, new unemployment claims data will be announced.

Fed officials’ speeches will continue. On this day, speeches by Raphael Bostic, President of the Atlanta Fed, and Michael Barr, Vice Chair of the Fed, are scheduled.

Government bond yields are steady. The U.S. 10-year Treasury yield, a global bond yield benchmark, fell 2 basis points (1bp = 0.01 percentage points) from the previous trading day to 3.84%, while the 2-year Treasury yield, sensitive to monetary policy, dropped 5 basis points to 4.01%.

By stock, cybersecurity company Palo Alto Networks is up 6.72% after announcing quarterly earnings and forecasts that exceeded market expectations. U.S. interior and building materials company Lowe’s is down 0.43%. The stock decline follows a sales announcement below market expectations and a downward revision of annual profit forecasts due to slowing consumer spending.

International oil prices are slightly down amid Middle East truce negotiations and forecasts of a slowdown in China’s economy. West Texas Intermediate (WTI) crude oil is trading at $74.33 per barrel, down $0.04 (0.05%) from the previous trading day, and Brent crude, the global oil price benchmark, is at $77.64 per barrel, down $0.02 (0.03%).