The stock market was calm on Monday before a wave of key retail earnings reports and Federal Reserve Chairman Jerome Powell’s Jackson Hole speech in the week ahead.
The Dow Jones Industrial Average dipped 12 points. The S&P 500 and Nasdaq Composite were hovering around breakeven.
“Stocks continued to run with good news and shrug off bad news last week, pushing to multiple record highs despite mixed inflation data,” writes Chris Larkin, managing director, trading and investing at E*TRADE from Morgan Stanley. “For now, the market appears to be betting that signs of labor-market weakness will outweigh inflation risk in the Fed’s rate-cutting debate.”
The yield on the 2-year Treasury note was down to 3.76%, while the 10-year yield was down to 4.31%.
There wasn’t much happening in markets, but that will change tomorrow when Home Depot kicks off a gauntlet of retailer earnings reports. Target and TJX will go on Wednesday, followed by Walmart and Ross Stores on Thursday.
Then on Friday, Powell will address attendees at the Jackson Hole conference. The speech comes as the White House continues to pressure the central bank to lower interest rates despite concerns about the potential for tariffs to reaccelerate inflation.
Odds of a September interest-rate cut are at 82.9%, according to the CME FedWatch Tool, but the decision will ultimately depend on the data between now and the Federal Open Market Committee’s Sept. 16-17 meeting.
“We still think that the Powell speech at [Jackson Hole] will be the main event of the week,” writes Andrew Brenner, head of international fixed income at NatAlliance Securities. “Powell could embrace the weaker employment outlook, implying that September is a done deal… Or he can try to keep maximum optionality to see the next inflation numbers and employment numbers… Or he could be his recent stubborn self and focus on Data Dependency.”
