U.S. equities gained before a key speech by Jerome Powell, in which the Federal Reserve chair may reinforce the message that it would be appropriate to begin tapering the Fed’s bond purchases by the end of the year.
The S&P 500 and Nasdaq 100 rose ahead of the much-anticipated address from the Jackson Hole symposium at 10 a.m. New York time, where traders hope to gain more insight into the central bank’s thinking about unwinding stimulus. Treasuries, gold and the dollar were little changed.
The remarks come as the latest reading of a closely watched measure of inflation remained elevated, highlighting the case for starting policy normalization amid signs of improvements in the labor market despite the threat of the delta virus variant on the global economic recovery. Data on consumer spending growth also moderated in July.
“Jackson Hole is finally here and although it is being telegraphed as a non-event we will still hear from several Fed members including Powell, which may give us some hint as to how the Fed is thinking about and modeling the delta variant,” said Brad Bechtel, Jefferies global head of FX.
A flood of Treasury options expiring Friday has raised the prospect for volatility on the day as Fed officials have been saying the time to start tapering is near. At a meeting in July, most policy makers said it probably would be appropriate to begin paring the Fed’s $120-billion-a-month bond-buying program this year.
The Stoxx Europe 600 index gained, putting it on track for a seventh straight month of gains, the longest streak in eight years. Stocks climbed in China, where the central bank supported sentiment after signaling targeted steps to cushion the economy. West Texas Intermediate crude headed toward its best week since October. Bitcoin steadied around $47,000.
Here are some events to watch this week:
- Fed officials participate in the Jackson Hole Economic Policy Symposium on Friday.
Some of the main moves in markets:
- The S&P 500 rose 0.4% as of 9:52 a.m. New York time
- The Nasdaq 100 rose 0.2%
- The Dow Jones Industrial Average rose 0.3%
- The Stoxx Europe 600 rose 0.2%
- The MSCI World index rose 0.3%
- The Bloomberg Dollar Spot Index fell 0.1%
- The euro rose 0.1% to $1.1769
- The British pound rose 0.3% to $1.3740
- The Japanese yen was little changed at 110.11 per dollar
- The yield on 10-year Treasuries declined one basis point to 1.34%
- Germany’s 10-year yield was little changed at -0.41%
- Britain’s 10-year yield was little changed at 0.60%
- West Texas Intermediate crude rose 2.2% to $68.91 a barrel
- Gold futures rose 0.1% to $1,797.20 an ounce
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