In Markets "In a Nutshell"

Markets “In a Nutshell” for August 19, 2024

Investment Week at a Glance

Stocks finished higher for the week. The Dow Jones Industrial Average rose 2.90%, the S&P 500 was up 3.90%, and the NASDAQ rose 5.30%. Foreign stocks (MSCI EAFE) were also up, rising 2.70%. Bond prices were up for the week, with the 10-year U.S. Treasury ending the week at 3.88%.  (Data source: Wall Street Journal)

Market Rallies

After a few weeks of a slight pullback, the overall market bounced back last week recouping most of the losses we saw. Some better economic data came in the past week as both the consumer price index (CPI) & producer price index (PPI) came in lower than expected for July. Retail sales were also robust, and the number of jobless claims came in below expectations. This helped take some recession fears off of the table for the time being as the recent data would not suggest the economy is in a sharp decline. The next jobs report will be released on September 6th and could move the market in either direction. It will also give the Fed another data point before their rate decision in their September meeting in which they are expected to make their first rate cut.

Jackson Hole Symposium

The annual economic symposium at Jackson Hole is this week and the market will be paying close attention to Fed Chair Powell’s remarks on Friday. Last year the market wanted to know how long rates would need to stay high to defeat inflation, this year the market has one thing on its mind and that is rate cuts. The market is hoping to get some clarity on whether they can expect a 0.25% rate cut or a 0.50% rate cut next month. Although it is unlikely he will directly come out and take a stance, he may hint at going one way or the other. Throughout the Fed raising rates they have been very transparent and many expect the same for when they begin their rate cut cycle. This can help calm market volatility on the days of Fed meetings so the market doesn’t get a surprise one way or the other.

Quiz:

Why is the annual meeting held in Jackson Hole? (Scroll Down for Answer)

  1.    Fly-fishing
  2.    Safe to meet
  3.    Good weather
  4.    Central location

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Answer below.

 

 

Have a Great Week!

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Answer:

1.  Fly-fishing. At the time of the first meeting in 1982, the Fed Chair was Paul Volcker. They wanted to make sure he would attend the meeting and knew he was an avid fly-fisher. They decided to pick Jackson Hole as it was known for good fly-fishing in August.