By Bill Hornbarger, Chief Investment Officer
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Three Things to Watch
- All eyes will be on the annual Jackson Hole Economic Forum hosted by the Kansas City Fed that starts on Thursday. Fed Chairman Jerome Powell will be one of the speakers at the event attended by finance ministers, market participants and central bankers from around the world.
- Economic data out this week includes durable goods, new home sales, and several regional manufacturing reports. Important readings on inflation and inflation expectations will be released on Friday in the form of core personal consumption expenditures (PCE) from the GDP data and the University of Michigan Inflation Expectations. There is a growing narrative in the market that inflation possibly peaked in June.
- More earnings reports will be released this week with a focus on the consumer/retail sector. Companies scheduled to report include Macy’s, Gap, Dollar Tree, and Dollar General.
Three Things to Know
- Last week, the leading economic indicators (LEI) for July were released and were negative. That marks the fifth consecutive monthly decline for the LEI, a development typically associated with a recession. (Source: Benjamin F. Edwards)
- A Reuters survey of economists showed a 45% median probability of a recession over the coming year and a 50% chance within two years. Thirty-seven of 48 economists said if the U.S. enters a recession within the next two years, it would be short and shallow. (Source: Reuters)
- The U.S. monetary base has already shrunk by a trillion dollars since its peak in 2021, another sign of tightening financial conditions. The monetary base is acomponent of a nation’s money supply. It refers strictly to highly liquid funds including notes, coinage, and current bank deposits. (Source: Investopedia, Markets & Mayhem)
The above information reflects the current opinion of the author. It is based upon sources and data believed to be accurate and reliable. Opinions and forward-looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security mentioned.