The Fed chair’s speech on Friday could give investors a clearer signal about where interest rates are headed as the central bank gets ready to start slashing borrowing costs in a bid to support the U.S. labor market.
There will be some economic data for investors to chew through between now and Powell’s speech, though. The Labor Department publishes its weekly jobless claims numbers on Thursdays, while S&P 500 manufacturing and services PMI figures are also due out.
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Stock futures were looking for direction Thursday’s with markets on edge ahead of Federal Reserve Chair Jerome Powell’s speech to the Jackson Hole monetary policy conference.
Dow Jones Industrial Average futures were up 49 points, or 0.1%. Contracts tied to the benchmark S&P 500 were also up 0.1% as were those on the tech-heavy Nasdaq 100 were rising less than 0.1%, after both indexes ended Wednesday a tick higher.
It will be tough for markets to take a firm direction until Powell has addressed Jackson Hole. The Fed chair’s speech on Friday could give investors a clearer signal about where interest rates are headed as the central bank gets ready to start slashing borrowing costs in a bid to support the U.S. labor market.
“Traders are taking a wait-and-see approach, with volumes at some of the lowest they’ve been all year,” Matt Brintzman, an equity analyst for Hargreaves Lansdown, said. “But that hasn’t stopped the momentum, and the S&P 500 is now just 1% shy of its all-time high.”
There will be some economic data for investors to chew through between now and Powell’s speech, though. The Labor Department publishes its weekly jobless claims numbers on Thursdays, while S&P 500 manufacturing and services PMI figures are also due out.
Bond yields, which have retreated slightly this week, were largely unchanged over the past 24 hours. The yield on the 10-year Treasury note was 3.796%, while the yield on the 2-year note was 3.936%.
Gold has been on a tear lately. The precious metal is up 23% for the year and has set new all-time highs in recent weeks, with prices above $2,500 an ounce for the first time.
Swiss bank UBS thinks the commodity’s record run can continue. Strategist Joni Teves said in a research note on Thursday that gold was set up well to take a “next leg higher,” pointing to the Fed’s looming interest-rate pivot as well as the expectation that November’s U.S. election will drive up demand for assets that are perceived as safe havens.
“The market appears to be getting comfortable above $2,500… dovish Fed expectations, lower rates, and a weaker US dollar have all been positive for the gold price,” Teves wrote. “Persistent geopolitical risks and the increasing focus on the upcoming US elections and corresponding implications on fiscal policy also reinforce investor interest.”
