Why Powell’s Speech Caused a Rally
What’s in Today’s Report:
- Why Powell’s Speech Caused a Rally
- Weekly Market Preview: Will Data Keep the Goldilocks Rally Going?
- Weekly Economic Cheat Sheet: Jobs Week (This is the Most Important Jobs Report in Months)
Futures are slightly higher mostly on momentum from Friday’s “dovish Powell” rally, following a quiet weekend.
Fed Chair Powell’s speech on Friday was taken as slightly dovish and that drove the rally in U.S. stocks and it’s carried over globally as we start a new week (all the major foreign markets we monitor are modestly positive).
Economic data was sparse as Euro Zone Economic Sentiment slightly missed expectations (117.5 vs. (E) 118) although that’s not moving markets.
Today there is one economic report, Pending Home Sales (E: 0.3%), but that shouldn’t’ move markets. Instead, as long as the dual tailwinds of 1) Receding COVID cases in the U.S. and 2) A dovish Fed remain, stocks should be buoyant (although if either idea is contradicted expect some give back of last week’s rally). Finally, keep in mind this is one of the most popular vacation weeks of the year due to the looming Labor Day weekend, so don’t be surprised by low volumes and some added volatility.
