A Lot Riding On The Fed
Fiona Cincotta August 27, 2020 7:37 AM
The calm before the storm. Asia traded muted overnight, Europe is pointing to a mildly mixed start and the FX markets are subdued ahead of Jerome Powell taking to the virtual stage at Jackson Hole.

Wall Street rolled on with another record day. The S&P hit its fourth straight closing high and the Nasdaq set its 39th closing high YTD as investors remained focused on big tech and large cap momentum stocks which have continued to outperform since the start of the coronavirus outbreak.
Whilst Jerome Powell is the star performer, warm up acts in the form of US GDP data (2nd revision) and initial jobless claims will also be in focus.
US GDP is expected to see a very slight downward revision to 32.6% from 32.9%. Initial jobless claims could garner more interest. Last week they rose back above 1 million, potentially the first sign of trouble after the Federal additional $600 unemployment benefit expired. Should claims remain over 1 million pressure will ramp up on Congress to agree to an additional rescue package.
Oil unusually steady ahead of Hurricane Laura
The price of oil has barely changed over the past two session even as oil rigs and refineries shut in preparation for a huge tropical storm in the Gulf of Mexico. Usually these storms create significant volatility in oil prices given the supply impact. But this, year, as we know, is not like any other year. High inventories as a result of the coronavirus pandemic hit to demand, combined with uncertainty over future demand means that the oil market can take these storms in its stride.
With coronavirus cases rising in parts of Europe, such as France and Spain, fears are rising of a second wave. Whilst the governments are vocally against a second national lockdown, oil markets are still nervous.
SPX Chart
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