The annual Jackson Hole Economic Symposium has moved markets in previous years and investors will be eagerly awaiting this year’s central bank festival for hints of possible monetary policy shifts later in the year.
The FTSE 100 was 0.70% higher at 7,320 shortly before the close on Wednesday as a wave of optimism sent global stocks north.
“The FTSE 100 made steady progress on Wednesday as investors await the start of potentially the driest shindig in the world, with central bankers due to meet at the Jackson Hole Economic Symposium from tomorrow,” said AJ Bell investment director Russ Mould.
“While fun might not be on the agenda – interest rates and inflation definitely are – the chair of the Federal Reserve, Jerome Powell, will take centre stage when he delivers his speech on Friday.
“His words could help set the tone for stocks heading into the autumn after recent fears the strength of the US economy could lift the lid once again on inflationary pressures and necessitate higher rates for longer.”
Markets are now pricing interest cuts from mid-2024 after repricing cuts to begin this year. Should the markets again reprice interest cuts further into the future as a result of tomorrow’s event, one would expect volatility in equity markets.
NVIDIA
US indices have been supported by a concentration of 8 US tech stocks this year and one of the best performers, NVIDIA will report later today.
The company has surged due to AI-induced demand for their chip processors and tonight’s results promise to be a rollercoaster, not only for NVIDIA shares but the entire equity market.
“Another big driver of sentiment is likely to be provided tonight when chipmaker Nvidia reports earnings,” Russ Mould said.
“A lot is riding on these numbers, with the shares surging to fresh record highs ahead of their release. Given much of the gains made by equities in 2023 have been centred on Nvidia and the whole AI story, they are likely to have a significant impact on the wider market too.”