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M Notes:  Mon, 8-30 Thumbnail

M Notes: Mon, 8-30




Weekly Close:
8-27--2021
+ (-)%
Dow35,456+336+1.0%
S&P4,509+67+1.5%
Nasdaq15,129+414+2.8%
10-year1.31+0.06+4.8%


LAST WEEK:

Markets Fed Chair Jerome Powell’s Jackson Hole remarks were perceived as dovish.  That led to another round of all-time highs.  

The S&P roller coaster last week:  Up, up slightly, up a touch, down, and up a lot.

Durable goods:  Orders were up +0.58% in June (the data lags a month).   We got the July update on Wednesday, with it dropping -0.1%... slightly better than expectations.

Fed:  Since 1982 the Kansas City District has hosted the Fed’s summer conference and other guests out in Jackson Hole, WY.  In the July minutes, released last week, there was discussion about “tapering” down their asset purchases ($120 Billion/month of Shazam money).  That’s not new, it’s been speculated on for months now.  What was new was discussion by some that the tapering could start before the end of the year.  Segway to the Jackson Hole symposium.  The key address was from the Fed Chair Friday morning.  Normally the meeting starts with a dinner on Thursday, followed by meetings Friday and Saturday.  This year, due to Covid, the symposium was virtual.  What I found interesting: a number of the 12 Fed District Presidents were interviewed by CNBC correspondent Steve Liesman prior to the Fed Chair’s address Friday morning.  All of them said they were for an “early taper” meaning the Fed’s asset purchases would begin to decrease by the end of the year.  Additionally, in all of the interviews I heard those Presidents say that the Fed’s interest rate would remain near zero until the end of 2022.  And shocker… that's pretty much what the Fed Chair said in his Jackson Hole address.  It’s almost like they coordinated it.  😄  The Fed’s balance sheet is now up to $8.3 Trillion (and climbing).  

GDP:  The second read on Q2 GDP came out Thursday.  It moved from +6.5% up a tick to +6.6%. 

Housing  We got the Starts number two weeks ago (-7% in July and +2.5% YOY).  Last week Existing Home Sales were up +2% in July and are up +1.5% YOY.  New Home Sales were up +1% in July but are -27% YOY.  

Jobless claims The weekly number came in at 353,000.  

PCE:  The Personal Consumption and Expenditures Index is the inflation measure the Federal Reserve focuses on.  It started the year at 1.3%.  In the update last Friday is rose from 4% up to 4.2%.  That's the largest PCE read in over 20 years (November 1990).

Radio A key inflation update, and an overview of the Jackson Hole Fed Symposium, were the focus of the last segment Bill and I discussed last Friday.  We are normally on most Fridays at 6:38a, 7:38a, and 8:38a on 1100AM.  Here’s the link:  https://parker-wealth.com/bill-and-chris-podcasts/bill-and-chris-fri-8-27. 


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THIS WEEK:

Focus of the week:  It will come on Friday morning when we get the latest jobs and unemployment numbers.   Coming off of 943,000 jobs, expectations are for 740,000 new jobs.  The unemployment rates is expected to move from 5.4% to 5.2%.

Earnings season:  It is basically over.  A couple of the companies reporting this week:  Campbell Soup and Hewlett Packard. 

Indicator focus:  ISM manufacturing index, the ADP employment report (Wed); international trade, factory orders, jobless claims (Thu), the ISM services index, and the latest jobs and unemployment numbers (Fri).