Will The Jackson Hole Symposium Restore Investors’ Confidence?

The market is waiting for the release of multiple economic statistics scheduled throughout the next two days. Currently, all eyes have turned to the Jackson Hole Symposium.

The world’s most respected economists, finance ministers, and bankers will attend the event, including the Federal Reserve Chairman, Jerome Powell. The market is hoping that the chairman will give some insight regarding the monetary policy over the next few months and the current economic condition.

The Jackson Hole Symposium will likely influence all markets, including commodities and equities. Market participants will also turn their attention to the latest GDP figures for the US, which are due this afternoon.

The US is in a recession as the GDP figure has declined for two consecutive quarters. However, most economists have not called it a recession yet. Will another economic contraction change this? This is something the market is waiting to see.

This morning, the US Dollar Index has dropped to 108.8, significantly lower than the market open price. Today’s decline measures 0.59% and has pushed the index to the previous week's price range.

The US Dollar may have been pressured by other negative economic figures released during yesterday’s US trading session. The upcoming events are also likely to put additional pressure on the currency.

These events may make traders feel uneasy as they hope for further clarity before positioning their trades. The price movement, which we will see over the coming weeks, may depend on the developments of the next two days.

The weaker Dollar has also triggered some positive movement on the XAU/USD charts. Gold has slightly rallied to form a retracement as a result of the weakening USD and potentially the poor performance of the US stock market over the past few days.

Crude oil continues to rise after Monday’s failed attempt to decline further. On Monday, oil declined to $86.20 - a price that had previously formed a recurring support level. The market quickly rejected the price and has since been pushed higher. Currently, the price is at $94.72 and has recently reached a 2-week-high of $95.52.

The price is supported by multiple factors related to the level of supply. It looks certain that the Organization of the Petroleum Exporting Countries (OPEC) and high oil-producing countries are attempting to avoid the price dropping further. Currently, investors seem to be avoiding the economic data, which is worrying many economists.

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The price of crude oil is being supported by a massive fiscal package introduced by the Chinese government to support economic growth and keep demand high. This has significantly impacted China as the world’s largest oil importer. In addition, the oil inventories have again come in lower than expected by the market.

Crude oil inventories were predicted to be from -2.2 to -2.6 million barrels. However, the confirmed figure was -3.3 million barrels, which means commercial firms have held 10.4 million fewer barrels of oil over the past two weeks. 

Yesterday, Saudi Energy Minister Salman confirmed the possibility of another reduction in production to compensate for the recent decline in oil prices. This has also influenced the price in the past 24 hours.

h2 S&P 500 - Technical View/h2

The S&P 500 is starting to look more positive outside trading hours as the price increased by 0.70%. This is more than the asset experienced in yesterday’s whole trading session.

The price movement is positive but will remain a mere retracement unless the figure increases to a full price correction. The price is likely to form a Head and Shoulder pattern which can indicate further negative price action.

Nvidia (NASDAQ:NVDA) stock saw the biggest decline of -4.57% after trading hours. his is today’s largest decline, triggered by management's latest earnings reports and comments. The board of directors advised that the lower earnings resulted from a drop in sales due to macroeconomic conditions. The highlights are shown below.

• Earnings Per Share (EPS): $0.51 versus $1.26 expected by Refinitiv.
• Revenue: $6.7 billion versus $8.10 billion expected by Refinitiv.
• The stock which saw the largest increase over the past 24 hours is Illumina (NASDAQ:ILMN), which increased by 8.35%.

Earning season is now more or less over, so the S&P 500 over the next few months will most likely be influenced by consumer and investor confidence. This will also depend on the economic conditions and the monetary policy.

Written By: NAGA