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Powell’s policy shift, Laura slams Louisiana, and initial jobless claims.
Federal Reserve Chairman Jerome Powell’s virtual speech to the annual Jackson Hole symposium this morning will be closely watched by investors as he is expected to outline the central bank’s long-awaited framework review. It’s likely to result in policy makers taking a more relaxed view toward inflation, even to the point of welcoming moves above their 2% target to make up for previous low readings. Powell speaks at 9:10 a.m. Eastern Time from Washington.
Hurricane Laura made landfall in Louisiana early this morning packing winds of 150 miles per hour, making it one of the most powerful storms ever to strike the state. While the weather system will lose power as it moves over land, the damage caused could leave areas uninhabitable for weeks with flood waters not receding for several days. Oil remains close to five-month highs as investors await damage assessments while the regional hit accounts for just over half of the U.S.’s liquefied natural gas export capacity.
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The consensus estimate is for weekly jobless claims to come in at 1 million when the number is published at 8:30 a.m., with continuing claims continuing to move lower to 14.4 million. While last week’s pickup in claims reinforced the view that improvements in the labor market would occur in fits and starts, an improvement today would show the recovery trend remains in place.
The record-breaking global rally is showing signs of stalling as investors wait for Powell’s speech later this morning and concerns remain over China-U.S. relations. Overnight, the MSCI Asia Pacific Index slipped 0.1% while Japan’s Topix index closed 0.5% lower. In Europe, the Stoxx 600 Index was down 0.4% at 5:45 a.m. with banks and real estate companies among the worst performers. S&P 500 futures pointed to a drop at the open, the 10-year Treasury yield was at 0.675% and gold reversed some of yesterday’s gains.
As well as claims, we also get the second reading of second-quarter GDP at 8:30 a.m. July pending home sales are to 10:00 a.m. European Central Bank economist Philip Lane and Bank of Canada Governor Tiff Macklem are among the other speakers later at Jackson Hole. President Donald Trump will deliver his nomination speech to the Republican National Convention from the White House. Dell Technologies Inc., HP Inc., Dollar General Corp. and Tiffany & Co. are among the companies reporting earnings.