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Author: Don Obrien

Stocks mixed as traders eye Fed’s Jackson Hole event


Stocks traded mixed Thursday but still hovered near record levels, as traders monitored the start of a key Federal Reserve event.

The S&P 500 was flat to slightly lower after the index reached a new record level during Wednesday’s regular trading day and logged a fifth consecutive session of gains. The Nasdaq and Dow each ticked up.

Shares of Dow component Salesforce.com (CRM) gained after the software company boosted its full-year revenue forecast and topped second-quarter earnings estimates, with the company getting a boost from remote workers still turning in droves to Salesforce products. Shares of beauty retailer Ulta (ULTA) also advanced after the company posted quarterly sales growth of 60%, bringing revenue above pre-pandemic levels.

Stocks across the board have marched higher over the past several sessions as traders continued to digest the latest wave of positive corporate earnings results and looked past lingering concerns around the Delta variant.

Investors have also been awaiting the start of the Federal Reserve’s Jackson Hole symposium on Thursday, which is being held as a virtual event due to the virus. Fed Chair Jerome Powell is set to give a closely watched speech on the economic outlook on Friday, which will divulge more of his and the central bank’s thinking about the timing and scope of tapering the Fed’s pandemic-era asset purchase program.

According to a number of pundits, Powell will likely keep his messaging in line with his other recent public remarks, signaling the economy has progressed toward the central bank’s goals while still remaining a ways off from fully reaching the thresholds necessary to begin tapering.

“We don’t think the Fed is going to do anything suddenly, and we really don’t think Chairman Powell is going to indicate that they’re ready to move policy anytime soon,” Wells Fargo Senior Macro Strategist Zach Griffiths told Yahoo Finance. “If you look at the July FOMC statement, they did indicate that they have seen progress toward their goals, but if you listen to [Powell’s] press conference, he really walked that back and said they are still a ways off from the ‘substantial further progress’ threshold. So we expect Chairman Powell to remain resolutely dovish.”

“When we look out to 2022, we do think the taper is in full effect and is probably completed by the end of that year,” Griffiths added. “That could weigh on stocks a bit in 2022.”

Others noted that the Fed’s months-long hinting around tapering has helped prime markets for the eventual pivot away from highly accommodative policies, removing the element of surprise that may otherwise have triggered a rush of volatility in risk assets.

“Powell has really gone out of his way to over-communicate about the taper plans. He’s been talking about it for a year. They’ve been signposting,” John Bellows, Western Asset portfolio manager, told Yahoo Finance on Wednesday. “[Former Fed Chair Ben] Bernanke in May of 2013, I think, surprised a lot of people. They weren’t looking for a taper signal, and then all of a sudden Bernanke is talking about tapering. And I think it was that surprise that caused the volatility in 2013. And Powell’s desire to avoid that is why he’s been so deliberate in terms of communicating their plans.”

9:30 a.m. ET: Stocks open mixed amid Fed’s Jackson Hole symposium

Here’s where markets were trading Thursday just after the opening bell:

  • S&P 500 (^GSPC): -2.28 (-0.05%) to 4,493.91

  • Dow (^DJI): +39.05 (+0.11%) to 35,444.55

  • Nasdaq (^IXIC): -7.09 (-0.05%) to 15,036.63

  • Crude (CL=F): -$0.91 (-1.33%) to $67.45 a barrel

  • Gold (GC=F): -$2.70 (-0.15%) to $1,788.30 per ounce

  • 10-year Treasury (^TNX): +0.9 bps to yield 1.353%

8:40 a.m. ET: Domestic GDP was revised up to a 6.6% annualized rate in Q2 

U.S. economic activity rose at a 6.6% annualized rate in the June quarter this year, the Bureau of Economic Analysis said in its second revision on gross domestic product. This was a tick faster than the 6.5% growth rate reported previously. GDP had risen at a 6.3% annualized rate in the first quarter of 2021.

Non-residential fixed investments and exports were each revised higher in the second estimate, helping boost the headline index. On the other hand, however, private inventory investment, residential fixed investment and state and local government spending served as drags. 

8:34 a.m. ET: New weekly jobless claims increased last week, but held near pandemic-era low

New unemployment claims totaled 353,000 during the week ended August 21 to come in just slightly above the prior week’s pandemic-era low, new Labor Department data showed Thursday morning. During the previous week, new claims were at 349,000. Consensus economists were looking for 350,000 new claims in the latest report, according to Bloomberg data.

Meanwhile, the total number of Americans claiming unemployment benefits across all programs was still elevated, and increased versus the prior week. As of the week ended August 7, about 12 million Americans were claiming benefits across both state and federal programs, marking an increase of 182,000 versus the previous period.

7:41 a.m. ET: ‘I think it is time to begin to ease back’ on accommodation: Fed’s George

Esther George, the president of the Federal Reserve Bank of Kansas City, suggested she was in favor of removing the central bank’s highly accommodative policies and beginning the tapering process “sooner rather than later.”

“As I judge the guidance that the committee has offered around ‘substantial further progress’ toward its goals, that, in my judgment, we are reaching that point,” George told Yahoo Finance’s Brian Cheung in an interview on the sidelines of the virtual Jackson Hole symposium. “We’ve certainly seen strong job gains which tells us the labor market is moving forward. Certainly the levels of inflation right now, with our view that we’ve met the criteria for our inflation objective.”

“So I think it is time to begin to ease back from the amount of accommodation that’s going into the economy given the outlook that we have,” she added. “So I would be in favor of beginning that process sooner rather than later. And of course we’ll be having that conversation with my colleagues at our September meeting.”

George is an alternate voting member of the Federal Open Market Committee this year, and will be a voting member next year.

7:26 a.m. ET Thursday: Stock futures trade mixed ahead of Jackson Hole

Here’s where markets were trading Thursday morning:

  • S&P 500 futures (ES=F): -3.5 points (-0.08%) at 4,489.50

  • Dow futures (YM=F): +10.00 points (+0.03%) to 35,370.00

  • Nasdaq futures (NQ=F): -24.25 points (-0.16%) to 15,340.00

  • Crude (CL=F): -$0.63 (-0.92%) to $67.73 a barrel

  • Gold (GC=F): +$0.50 (+0.03%) to $1,791.50 per ounce

  • 10-year Treasury (^TNX): -0.2 bps to yield 1.342%

6:07 p.m. ET Wednesday Stock futures drift near records

Here’s where markets were trading Wednesday evening:

  • S&P 500 futures (ES=F): -0.5 points (-0.01%) at 4,492.50

  • Dow futures (YM=F): +22.00 points (+0.06%) to 35,382.00

  • Nasdaq futures (NQ=F): -2.25 points (-0.01%) to 15,362.00

NEW YORK, NEW YORK - AUGUST 10: People walk by the New York Stock Exchange (NYSE) on August 10, 2021 in New York City. Markets were up in morning trading as investors look to a rare bipartisan effort in the Senate to pass a massive infrastructure bill that, if passed, will infuse billions into the American economy. (Photo by Spencer Platt/Getty Images)

NEW YORK, NEW YORK – AUGUST 10: People walk by the New York Stock Exchange (NYSE) on August 10, 2021 in New York City. Markets were up in morning trading as investors look to a rare bipartisan effort in the Senate to pass a massive infrastructure bill that, if passed, will infuse billions into the American economy. (Photo by Spencer Platt/Getty Images)

Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck

https://finance.yahoo.com/

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