WILL THE JACKSON HOLE SYMPOSIUM BE OF ANY SIGNIFICANCE?

Will the upcoming Jackson Hole Symposium be of any significance, defined as will there be a major change in monetary policy?  In years’ past the Federal Reserve has used this platform to telegraph such.  Last year the Central Bank outlined its plan to permit both inflation and growth to run above the speed limit.  The issue at hand it still has not yet defined how much or how long.

Every time since 2010 the FOMC suggested tapering, volatility rises.  There is an old Wall Street Axiom of “Don’t Fight the Fed.”  The markets are entirely addicted to this high-power money.  This week could be of major significance.

However, as noted several times the topic of this year’s conference is income inequality.

Friday, I wrote Afghanistan is not impacting the markets.  Is this about to change?  Perhaps the greatest fallout to date is the perceived turning of the media.  How will this perceived change impact the implementation of the Biden Agenda?  Is it temporary?  I guess it depends upon how Afghanistan unfolds, the outcome of which are infinite.

Speaking of major changes, the Chinese government has abandoned its past policy of growth for one of social control.  Many have commented that China is now “un investible.”  How will this unfold?

We are living in incredible times.  There is the greatest challenge to foreign policy in at least twenty years.  There are potentially huge economic changes in the world’s second largest economy.  And then there is monetary policy.

I would argue monetary policy would have the greatest immediate impact but is this short sighted?  History suggests yes.  The world, the economy, can and has instantly change on the unexpected, most often a geopolitical event.

The economic calendar is comprised of various housing statistics, durable goods orders, a revision of 2Q GDP, inventories, personal spending and income and a sentiment indicator.  How will the data be interpreted?

Last night the foreign markets were up.   London was up 0.46%, Paris up 0.94% and Frankfurt up 0.24%.  China was up 1.45%, Japan up 1.78% and Hang Seng up 1.05%.

The Dow should open nominally higher on optimism China will backdown from recently announced policies and the belief that the end of the week Symposium will not issue in any great monetary changes.  The 10-year is off 5/32 to yield 1.28%.

 

The views expressed herein are those of Kent Engelke and do not necessarily reflect those of Capitol Securities Management. The information contained herein has been compiled from sources believed to be reliable; however, there is no guarantee of its accuracy or completeness. Any opinions expressed are statements of judgment on this date and are subject to certain risks and uncertainties which could cause actual results to differ materially from those currently anticipated or projected. Any future dividends, interest, yields and event dates listed may be subject to change. An investor cannot invest in an index, and its returns are not indicative of the performance of any specific investment. Past performance is not indicative of future results. The material provided in Daily Market Commentaries or on this website should be used for informational purposes only and in no way should be relied upon for financial advice. Please be sure to consult your own financial advisor when making decisions regarding your financial management. Members of FINRA and SIPC, Capitol Securities Management is a privately owned full-service retail brokerage and investment advisory firm headquartered in Richmond, Virginia. For nearly 30 years, we have been serving the needs of our investors. Today, more than 200 Capitol Securities Management investment professionals and support staff serve approximately 18,000 customer accounts from Southern Florida to the New England coast.