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July 14, 2024
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Key Financial Market Events This Week: August 19 Overview
Overview of Major Events in Financial Markets on August 19:
As Wall Street steadies after a strong performance last week, the financial markets are poised for significant events, including the release of the Federal Reserve’s last meeting minutes and the highly anticipated Jackson Hole Symposium. Additionally, the four-day Democratic National Convention kicks off this week, promising to be a crucial event for the political landscape.
1. Jackson Hole Symposium Anticipation
This week’s focal event is the Federal Reserve’s annual economic symposium in Jackson Hole, Wyoming, starting on Friday. Investors are keenly awaiting insights on potential rate cuts in the coming months. The markets are hopeful for a smooth economic landing, buoyed by recent positive data that alleviated some recession fears, marking one of the best performance weeks this year.
Most market participants anticipate a rate cut at the Fed’s upcoming September meeting. The central debate is now around the extent of the cut—whether it will be 0.25% or 0.50%. Federal Reserve Chair Jerome Powell’s speech is set to be a highlight, particularly after dovish signals from Fed officials Mary Daly and Austan Goolsbee suggested a possible easing in September.
2. U.S. Stock Indices Consolidate
U.S. stock index futures saw slight declines in pre-market trading on Monday, consolidating after a robust rise last week. Last week, major indices were uplifted by optimistic views on the U.S.’s economic fundamentals. This week, market watchers are focusing on the Federal Reserve’s upcoming release of its latest meeting minutes on Wednesday and Chair Jerome Powell’s speech on Friday.
3. Democratic National Convention Kick-Off
The four-day Democratic National Convention opens on Monday, with Vice President Kamala Harris expected to formally accept the party’s presidential nomination in a highly anticipated speech on Thursday. Following a challenging debate with Republican candidate Donald Trump in late June, President Joe Biden withdrew from his reelection campaign, stirring calls within the party for new leadership.
4. Goldman Sachs Adjusts U.S. Recession Probability
Recently, Goldman Sachs lowered the probability of the U.S. entering a recession in the next 12 months from 25% to 20%, citing robust economic data released since early August. This adjustment follows an initial increase from 15% earlier this month due to concerns sparked by a rise in the unemployment rate in July. However, subsequent data, including a positive retail sales report for July, suggests no immediate signs of a recession.
5. Ongoing Gaza Ceasefire Negotiations and Oil Price Decline
Oil prices fell on Monday due to concerns over weakening demand from China, one of the major oil-importing countries, and ongoing ceasefire negotiations in the Middle East. Data from China showed a sharp decline in new home prices and a slowdown in industrial output, which contributed to a nearly 2% drop in benchmark oil prices last Friday.
As negotiations continue this week in Cairo, following a two-day meeting in Doha last week, U.S. Secretary of State Antony Blinken stressed that the latest diplomatic efforts to achieve a ceasefire in Gaza might represent the best, and possibly last, chance to avert further conflict in the region. The urgency for a ceasefire agreement grows as concerns over regional conflict potentially affecting oil supplies loom larger.
