Weekly Market Commentary, August 29th, 2022
ROBARE & JONES ON THE MARKETS
The S&P 500 closed lower for a second straight week as Federal Reserve chairman Jerome Powell's blunt remarks at the Jackson Hole Fed symposium spooked financial markets and left all the major US indices with heavy losses. As a result, the benchmark index closed the week 4% lower at with all 11 sectors ending the week in the red except for Energy. But the economic data was eclipsed Friday by Powell's blunt message to Wall Street that struck a very different tone from his "inflation is transitory" speech from Jackson Hole 2021. Powell's hawkish tone came with a warning that the Fed would do whatever is necessary to restore price stability, even if efforts to slow the economy lead to a recession.
Gloomy data on manufacturing and the housing market this week showed new home sales plunging 12.6% in July while pending home sales were down another 1% as higher mortgage rates continue to choke off demand. The S&P Global services PMI fell to its lowest level since May 2020 while the Richmond Fed manufacturing index sunk to a 27-month low.
This week's calendar could give the Fed the ammunition it needs for another 75 basis point rate hike at its next FOMC meeting (Sept 20-21) with data data on the labor market for job openings and labor turnover (JOLTS) Tuesday, private payrolls (ADP) on Wednesday, culminating in the pivotal August non-farm payroll report Friday with early estimates at +290,000.
Let's take a look at the markets from this past week!
What are your thoughts about the current market conditions? Let us know!