Stocks and U.S. futures were steady as a rebound in Chinese technology shares stalled and markets settled into a holding pattern ahead of the Federal Reserve’s Jackson Hole policy symposium later this week.
The Stoxx Europe 600 index posted a modest gain, while contracts on the S&P 500 and Nasdaq 100 fluctuated after the indexes reached fresh records on Tuesday. A Hong Kong gauge of Chinese tech names struggled to extend this week’s rally amid lingering concerns about Beijing’s crackdown on private industries. Treasury yields were flat and the dollar was little changed against a basket of major peers.
Company earnings, expanding vaccinations and support from monetary policy have partially repaired sentiment after a bout of jitters over economic prospects caused by the delta strain. The next key read on the central-bank outlook is due later this week when Fed Chairman Jerome Powell speaks at the virtual Jackson Hole get-together on Friday.
“There is a sense of stabilization in the markets, as investors are already looking forward toward the Jackson Hole meeting,” said Dariusz Kowalczyk, a senior strategist at Credit Agricole CIB. “With uncertainty regarding Fed Chair Jerome Powell’s message, markets are likely to not take new major positions until there is more clarity on the Fed’s outlook.”
Investors are hoping the Jackson Hole event will provide more clarity on the Fed’s thinking on monetary stimulus amid a takeoff in inflation but still-mixed economic data. This week’s reports from purchasing managers worldwide showed the return of concern about the outlook for growth, with U.S. business activity slowing to the weakest in eight months.
Powell has already initiated formal talks on a path toward pulling back on the central bank’s massive bond buying program, a schedule he may offer more perspective on this week. Most Fed officials last month judged that it likely would be appropriate for the reductions to start this year.
commodities, oil was steady after the biggest two-day gain since November with Covid-19 still shadowing assessments of the demand outlook. Iron ore futures extended a rebound from last week’s rout on optimism that China won’t allow steel demand to collapse while its economic prospects remain uncertain.
Meanwhile, U.S.-China tension is back in focus. Securities and Exchange Commission Chair Gary Gensler pledged to enforce a three-year deadline for U.S.-listed Chinese firms to permit inspections of their financial audits or face delisting.
– Yahoofinance