The Week Ahead: Jackson Hole, durables, real estate, FOMC minutes

JacksonHoleEconomically significant? Sometimes. Often of interest? Sure. Who doesn’t take notice when the powerful gather to celebrate their power. And to exchange ideas. And maybe, to learn. Or to mislearn.

The Federal Reserve Bank of Kansas City, as it has since 1978, hosts the annual Economic Policy Symposium, and as has been the case since 1982, the location will be Jackson Hole, Wyoming, which has better mountains than the bank’s home base.

The symposium’s theme this year: “Changing Market Structure and Implications for Monetary Policy”. In a time when the Fed continues to tighten the Fed Funds rate, and seven months after the S&P 500 hit a peak that has not been equalled since, it’s a topic that ought to make the heart of every trader’s heart beat just a little bit faster.

The full agenda can be found here. The most closely watched speech will likely be that of Fed Chairman Jerome Powell, who takes to the podium on Friday at 10 a.m. New York time to discuss monetary policy.

There are also major economic reports to be followed during the week: Durable goods orders — how confident are buyers that it’s a good time to take-on significant capital purchases — on Friday at 8:30 a.m., and two real-estate reports, existing home sales on Wednesday at 10:30 a.m., and new home sales on Thursday at 10 a.m.

The Fed outside of Jackson Hole will also get a moment in the sun with the release on Wednesday at 2 p.m. of Federal Open Market Committee minutes from the July 31-Aug. 1 meeting, at which members voted to raise the Fed Funds rate by 25 basis points.

Leading indicators (in descending order of importance):

The interest rate spread between 10-year Treasuries and the federal funds rate, reported continually during market hours.

The M2 money supply, at 4:30 p.m. Thursday.

The S&P 500 index, reported continually during market hours.

Average weekly initial claims for unemployment, from the jobless claims report at 8:30 a.m. Thursday.

Events arranged by day:

Wednesday: Existing home sales at 10 a.m., petroleum inventories at 10:30 a.m. and the FOMC minutes at 2 p.m.

Thursday: Jobless claims at 8:30 a.m., the Purchasing Managers Institute composite flash report at 9:45 a.m., new home sales at 10 a.m., and the M2 money supply at 4:30 p.m. Also, the Jackson Hole symposium begins.

Friday: Durable goods orders at 8:30 a.m. and a speech at Jackson Hole by Fed Chairman Powell at 10 a.m.

I also keep an eye on the Baltic Dry Index, updated daily, and the 10-year implied inflation rate which is the difference between the yields on 10-year U.S. Treasury notes and  10-year Treasury inflation protected securities (TIPS).

By Tim Bovee, Portland, Oregon, Aug. 18, 2018


Tim Bovee, Private Trader tracks the analysis and trades of a private trader for his own accounts. Nothing in this blog constitutes a recommendation to buy or sell stocks, options or any other financial instrument. The only purpose of this blog is to provide education and entertainment.

No trader is ever 100 percent successful in his or her trades. Trading in the stock and option markets is risky and uncertain. Each trader must make trading decisions for his or her own account, and take responsibility for the consequences.

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