U.S. stock index futures lacked clear direction in early trading Friday, Aug. 28, as investors awaited a closely watched speech from Federal Reserve Chair Woshi. Tech investors began taking profits after Nvidia (NVDA.O) helped drive gains the previous day. Societe Generale analyst Rajappa said this week's core PCE data signaled that inflation is proving stickier than expected, adding that the data this year points to a need for policy action soon. Historically, the Fed chair's Jackson Hole speech has not been a major catalyst for equities; since 2000, the S&P 500 has averaged a move of just 0.4% in the week after the symposium without a broader monetary policy shift. Apollo Management chief economist Torsten Slok expects no forward guidance from Woshi on Friday, but he said long-term yields could move, with the Fed chair's views on inflation, unemployment and the neutral rate likely to drive the long end of the yield curve.
U.S. equity futures showed little direction in early trading Friday morning, Aug. 28, as investors awaited a closely watched speech by Federal Reserve Chair Woshi. Tech investors, meanwhile, began taking profits after Nvidia (NVDA.O) helped lift the sector higher the previous day.
Rajappa, an analyst at Societe Generale, said this week's core PCE data delivered a clear message: inflation is proving stickier than expected. "The core PCE data this week sent a very clear message that inflation is actually more stubborn than we anticipated," he said. "If you look at the data for this year as a whole, you have to consider taking some policy action soon."
History suggests the Fed chair's Jackson Hole speech is not a major catalyst for stock market swings. Since 2000, without a larger monetary policy shift, the S&P 500 has averaged a gain or loss of just 0.4% in the week after the Jackson Hole conference.
Torsten Slok, chief economist at Apollo Management, said he does not expect Woshi to offer forward guidance on Friday, but long-term yields could move. "Whatever he says about the policy framework and the economy — especially how he views inflation, unemployment and the neutral rate — could drive the long end of the yield curve," Slok wrote in a report.
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