Weeks Review into W/C 22nd August 2022-Jackson Hole

Weeks Summary

A four-week winning streak for U.S. equity markets was broken as losses onOvernight Session More Friday sent the major benchmarks into the red for the week. After Federal Reserve members reaffirmed their commitment to tighter monetary policy in spite of signals that inflation was slowing, markets fell. The Nasdaq fell 2.6%, the S&P 500 lost 1.2%, and the Dow fell 0.2% for the week. As hawkish remarks from Fed members sparked a selloff in government bonds, the yield onOvernight Session More the 10-year Treasury note increased, closing the Friday session at 2.98%. Early in the week, oil prices momentarily dropped to their lowest levels since late January as a result of worries about a slowdown in global demand and the resumption of lockdowns in China. West Texas Intermediate (WTI) crude’s price momentarily fell below $87 per barrel, onOvernight Session More Tuesday and Wednesday, before rallying to end the week at $90 per barrel.

https://ihsmarkit.com/research-analysis/week-ahead-economic-preview-week-of-22-august-2022.html

KEY TAKEAWAYS-Jackson Hole

• Federal Reserve officials will gather for the annual Jackson Hole Symposium beginning Thursday; this year’s conference is titled “Reassessing Constraints onOvernight Session More the Economy and Policy.”
• The latest update to the Personal Consumption Expenditures (PCE) price index will be released Friday, tracking price gains for common household expenditures in July
• Further updates onOvernight Session More the housing market will be made available, including new and pending home sales for the month of July

August flash PMIs will be in full focus this week and will offer updates onOvernight Session More economic conditions at the crossroads of weakening global demand and intensifying inflation. US economy watchers will be kept especially busy with a string of economic data, including US July core PCE figures, the second Q2 GDP estimate, as well as the Fed’s Jackson Hole symposium onOvernight Session More 25-27 August where there will no doubt be a jam-packed agenda. Central bank watchers will also be eyeing the monetary policy meeting in South Korea, Indonesia and China. Finally, Q2 GDP updates will also be released for Mexico and Germany.

Fed watchers’ attention turns to the Jackson Hole symposium after FOMC meeting minutes last week suggest further, albeit smaller, rate hikes in the pipeline. The second Q2 GDP estimate (forecast: -0.9%), is set to reiterate deteriorating economic conditions while core PCE figures are likely to show persistently high inflation.

In Europe, growth has cooled according to the July PMIs, therefore August flash figures will be watched with particular interest to assess how regions have responded to difficult trading conditions. Inflation concerns, supply issues and macroeconomic uncertainty are expected to weigh onOvernight Session More growth and, in some cases, lead to contractions in output. Meanwhile, Q2 GDP data for Germany is forecasted to slow to 1.4% (Q1: 3.6%) onOvernight Session More the back of inflation hitting 7.5% last month. Concerns also come onOvernight Session More the energy front, with threats to gas supply adding to consumer woes. Confidence data in the form of lfo business climate and Gfk consumer confidence figures are projected to reveal subdued sentiment.

Events Calendar:

Monday, August 22

• Palo Alto Networks (PANW), Zoom Video Communications (ZM), Nordson Corp. (NDSN), and Legend Biotech (LEGN) report earnings
• Chicago Fed National Activity Index (July)

Tuesday, August 23

• Intuit Inc. (INTU), Medtronic (MDT), JD.com (JD), Bank of Nova Scotia (BNS), Pinduoduo (PDD), J.M. Smucker Company (SJM), Advance Auto Parts (AAP), Dick’s Sporting Goods (DKS), Aluminum Corp. of China (ACH), Toll Brothers (TOL), Macy’s (M), Nordstrom (JWN), Urban Outfitters (URBN), and La-Z-Boy Inc. (LZB) report earnings
• S&P Global Composite
  In addition to monitoring the previous day's Market prof... More PMI – Flash Estimate (Aug)
• Richmond Fed Manufacturing Index (Aug)
• New Home Sales (July)

Wednesday, August 24

• NVIDIA (NVDA), Salesforce (CRM), Royal Bank of Canada (RY), Snowflake Inc. (SNOW), Autodesk (ADSK), China Life Insurance Company (LFC), NetApp (NTAP), Williams Sonoma (WSM), and Petco (WOOF) report earnings
• Durable Goods Orders (July)
• Pending Home Sales (July)

Thursday, August 25

• TD Bank (TD), PetroChina Company (PTR), Dollar General (DG), Vmware (VMW), Marvel Technology (MRVL), Dollar Tree (DLTR), Dell (DELL), Ulta Beauty (ULTA), Grab Holdings (GRAB), Burlington Stores Inc. (BURL), Gap More Inc. (GPS), Peloton Interactive (PTON), and Abercrombie & Fitch (ANF) report earnings
• U.S. GDP Growth Rate – Second Estimate (Q2 2022)
• Real Consumer Spending (Q2 2022)
• Kansas Fed Composite
  In addition to monitoring the previous day's Market prof... More Index (Aug)
• Day 1 of Federal Reserve’s annual Jackson Hole Symposium

Friday, August 26

• Personal Income and Spending (July)
• PCE Price Index (July)
• Goods Trade Balance (July)
• Michigan Consumer Sentiment Index – Final (Aug)
• Day 2 of Federal Reserve’s annual Jackson Hole Symposium

https://www.earningswhispers.com/calendar

https://www.bloomberg.com/news/articles/2022-08-21/powell-has-chance-to-reset-market-expectations-at-jackson-hole

https://www.reuters.com/markets/us/feds-powell-speak-aug-26-jackson-hole-conference-2022-08-18/

Price ActionPrice action More Review

Why look at the Weekly and Monthly?

Using the composite
In addition to monitoring the previous day's Market prof... More profiles gives me a lot of clarity in understanding the market. Understanding the story and the basic mechanics of what is going onOvernight Session More simplifies almost every other aspect of my trading, especially timing.

By identifying areas of balance/ acceptance in the auction I have a natural edge. I can identify value and the pivots of change. In balance I look to fade the extremes, when activity leaves an area of acceptance, I monitor for strength and conviction of the move. For this, I use volume and value as a guide. As a general rule, if a move is genuine, volume and value will move in away from prior acceptance to a new area.