Friday August 27th

27-08-2021

Stock futures are higher ahead of Fed Chair Powell’s speech

U.S. stock index futures rose on Friday ahead of the Federal Reserve’s annual Jackson Hole symposium with investors looking for more details into the central bank’s plans to taper monetary stimulus. Futures on the Dow Jones Industrial Average gained 86 points, or 0.2%. S&P 500 futures ticked up 0.3% and Nasdaq 100 futures added 0.3%. The Fed summit will be held virtually this year, with Chair Jerome Powell’s speech taking center stage Friday morning at 10:00 a.m. ET. The central bank is trying to prepare markets for when it cuts back its $120 billion in monthly bond purchases, likely this year. With the stock market near records, investors are betting the Fed can remove stimulus without causing a so-called taper tantrum that shoots rates higher rapidly and knocks equities. “The Fed may start tapering its bond purchases soon, which has caused a lot of angst on Wall Street and Main Street,” said Ally Invest chief investment strategist Lindsay Bell. “While it hasn’t caused any big swings yet, the Fed’s plans may be tough to digest against a backdrop of rising COVID cases and slowing, but solid, economic data. Plus, the market rarely stays quiet for this long.” Shares of Gap gained 8% in premarket trading after the apparel retailer’s quarterly earnings report beat on top and bottom lines, while Peloton shares dropped after the exercise equipment company’s fourth-quarter financial results missed Wall Street estimates. Peloton fell 7%. The three major U.S. indexes closed Thursday’s regular trading session lower. The Dow snapped a four-day win streak while the S&P 500 and the Nasdaq Composite both broke five-day win streaks. The Dow lost 192.38 points, or 0.5%. The S&P 500 slid 0.6% and the Nasdaq Composite fell 0.6%. Market participants also monitored new developments in Afghanistan, which appeared to weigh on investor sentiment. The Pentagon on Thursday confirmed that explosions near Hamid Karzai International Airport in Afghanistan killed 13 U.S. service members and wounded 18. “Markets don’t like uncertainty and the uncertainty in Afghanistan is high and feels like it’s rising,” said Bob Doll, chief investment officer of Crossmark Global Investments. The three major stock averages are all set to close the week in the green. The Dow is up 0.3% week-to-date, while the S&P 500 is up 0.6% and the Nasdaq Composite is 1.6% higher. The indexes are on track to end the month higher. The Dow is up 0.8% in August. The S&P 500 is 1.7% higher and the Nasdaq Composite is up 1.9% this month. Asia-Pacific markets traded mixed on Friday as investors remained cautious ahead of the Federal Reserve’s annual Jackson Hole symposium where Fed Chair Jerome Powell is due to speak. The Nikkei 225 in Japan fell 0.36% to 27,641.14 while the Topix index declined 0.34% to 1,928.77. South Korea’s Kospi rose 0.17% to 3,133.90 and the Hang Seng Index in Hong Kong was down 0.18% in late afternoon trade. Chinese mainland shares also rose: The Shanghai composite advanced 0.59% to 3,522.16 while the Shenzhen component added 0.15% to 14,436.90. Oil prices rose on Friday, on track to post big gains for the week, on worries about near term supply disruptions as energy companies began shutting in production in the Gulf of Mexico ahead of a potential hurricane forecast to hit on the weekend. U.S. West Texas Intermediate (WTI) crude futures climbed 16 cents, or 0.2%, to $67.58 a barrel at 0111 GMT, clawing back a 1.4% loss on Thursday. WTI is headed for a weekly gain of more than 8%, which would be its strongest rise since early February. Brent crude futures similarly rose 16 cents, or 0.2%, to $71.23 a barrel, after falling 1.6% on Thursday. Gold prices were steady on Friday, as investors awaited Fed chief Jerome Powell’s speech later in the day at the Jackson Hole symposium after some U.S. central bank officials called for paring bond purchases. Spot gold rose 0.1% to $1,793.68 per ounce by 0104 GMT. U.S. gold futures rose 0.1% to $1,796.70. The dollar held firm after bouncing off a one-week low in the previous session.