Jackson Hole: All Talk, No Market Action
Today's financial recap and tomorrow's financial outlook.
Federal Reserve Chair Janet Yellen's speech on the labor market was front and center on traders' minds.
Yellen stayed the course in terms of emphasizing data dependency, saying that the Fed "will be closely monitoring incoming information on the labor market and inflation in determining the appropriate stance of monetary policy".
Yellen discussed the difficulty in determining appropriate policy given current US labor market trends. She acknowledged that the unemployment rate has improved more rapidly than the Fed has anticipated, but also identified ongoing challenges like weak income growth and high levels of underemployment.
The Fed may allow inflation to run above the current 2% target to achieve its labor market goals. But there was a hawkish caveat to that revelation, as too much accommodation could later result in an abrupt tightening of monetary policy.
European Central Bank President Mario Draghi promoted tax cuts and increased government spending to help jump start Eurozone economic activity, even at the risk of inflation. He also emphasized the ECB's ongoing readiness to use "unconventional measures" to head off long-term economic damage.
Ukraine remained a source of tension.
Russia sent a convoy of over 200 trucks, supposedly on a humanitarian mission, into Ukraine, which was deemed an "unauthorized entry" by the Pentagon. NATO officials said that Russia also moved artillery units inside Ukraine and was using them for attacks.
Elsewhere, US deputy national security adviser Benjamin Rhodes said direct military action could be taken against ISIS to protect American interests in the Middle East.
Despite all the headlines, market activity was fairly muted, with the 10-Year US Treasury yield dropping slightly.
The S&P 500 fell just 0.2%, while the NASDAQ finished up 0.1%, aided by Apple (AAPL) rising to hit an all-time intraday high of $101.47. The strong biotech sector also helped keep the NASDAQ above water.
Gold saw volatility intraday courtesy of Jackson Hole, but the +0.5% move for the day was far from dramatic.
In earnings news, Foot Locker (FL) beat analysts' second-quarter revenue and earnings expectations.
Tomorrow's Financial Outlook
There are no major companies reporting earnings Monday, though momentum traders may be watching Chinese internet company Qihoo 360's (QIHU) result due before the open.
In US economics, the July New Home Sales report will be issued at 10:00 a.m. ET.
Follow the markets all day every day with a FREE 14 day trial to Buzz & Banter. Over 30 professional traders share their ideas in real-time. Learn more.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.
Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
Daily Recap Newsletter