The market began the week with a thud and finished with a louder thunder sound. The primary catalyst for the market was Fed Chair Powell's speech on policy during Jackson Hole Economic Policy Symposium.
On Monday, investors were worried to hear that Powell's speech would be a tad hawkish. Powell's remarks would be unwaveringly optimistic. The S&P 500 market decreased 2.1 percent on Monday.
On Friday, nonetheless, Powell sounded resolutely hawkish, and the S&P 500 sank 3.4 percent, completely eradicating an uninspiring (and relatively low volume) bounce off the lows of Monday that was observed in the following session.
As the closing bell rang on Friday, the leading market indexes were down 2.9-4.4 percent over the week. The majority of everything was rolled back. The selling was all-encompassing and affected the value of stocks across the board as investing factors of all sorts, and cyclical and countercyclical sectors prevailed.
This week, the only notable market gainers were the CBOE Volatility Index with a +24.5 percent gain, crude oil prices posting +3.0 percent, and the S&P 500 energy sector with +4.3 percent. The U.S. Dollar Index gained +0.6 percent, and the U.S. Treasury 30-year bond dropped -2 basis points to close at 3.21%.
The mega-cap stocks outpaced the overall market's losses. The Vanguard Mega-Cap Growth ETF dropped 5.0 percent over the week, followed by a drop of 4.1 percent in the Friday session. In their mega-cap component, the sectors of information technology lost 5.6 percent), communications services fell 4.8 percent, and consumer discretionary posted a negative 4.8 percent. These sectors were the most notable losers of the week's session.
Following a brief and concise speech by Fed Chairman Powell, who stated that the Fed would not be moving into a cut-rate cycle anytime in the near future. Powell pointed out the necessity to push rates to a restrictive level and then keep them higher until the Fed believes that inflation is returning in line with the Fed's target of 2 percent.
The Fed Chair has acknowledged openly that efforts to cut the rate of inflation "will also bring some pain to households and businesses" and said that "the "historical record cautions strongly against prematurely loosening policy."
The entirety of his comments aren't surprising; however, his manner of speaking was, in the sense that it implied the Fed would not appeal to the market's desire for lower interest rates - at least not at this moment, as the inflation rate is significantly higher than the Fed's designated target.
The trading session on Friday started with some positive inflation data that the market has received. The PCE Price Index and core-PCE Price Index, excluding energy and food, slowed in July. They increased 6.3 percent and 4.6 percent year-over-year, as well as 6.8 percent and 4.8 percent in June.
The discomfort was evident in a trend-down session following some high market volatility on the trading day. As noted, the Dow Jones Industrial Average dropped 1008 points as one of the effects of an outpouring washout that saw the other indexes fall between 3.0 and 3.9 percent on Friday's session.
The U.S. Treasury market which was already in the midst of a downward spiral due to the possibility of more aggressive Fed monetary policies, held its position more advantageously following Powell's speech. The interest on the Two-year note increased by one basis point to close at 3.40 percent, while the Ten-year note also climbed by one basis point to finish at 3.04 percent. The yields were up 15 basis points and five basis points during the week in each case. The month began with the yield on Two-year notes at 2.90 percent, while the ten-year note yield was 2.64 percent.
This week's precious market consolidated the previous week's downslide, with gold trading at 1737, down $11 on the week, and the silver metal traded at $18.88, down $0.14 for the same period. Prices for both precious metals appear to be in imprisonment. Indeed, the price action in financial markets typically reflects this indifference.
A $750 push to the upside on Friday took the Bitcoin market from $21,120 to $21,870 in less than one hundred twenty minutes. However, the movement was utterly erased after comments from Federal Chair Jerome Powell. Following Powell's speech, Bitcoin prices plunged as low as $20,119.
On the Bitcoin chart, the harsh price bar refers to the current down path, which is designated at Key Sup at $18,900 and completed Outer Coin Dip at $18,665, a descriptor of Bitcoin's volatile market price action. However, outside of these predictable analysis indicators designated by TradeSelecter, other economic and political determinants indicated BTC's broader bearish sentiment.
Eurodollar attempted to settle above our Mean Res 1.005. The European currency must close above 1.000 to have a possibility to generate sustainable upside momentum. However, as the currency market continues to trade under the 1.000 threshold, bears will have a fair chance to push it to and under Key Sup 0.9940 and completed Inner Currency Dip 0.9914, and further continue to Outer Currency Dip 0.9765.
INDEX: STARTED WEEK ENDED WEEK CHANGE %CHANGE YTD%
DJIA: 33706.74 32283.40 -1423.34 -4.2 -11.2
Nasdaq: 12705.22 12141.71 -563.51 -4.4 -22.4
S&P 500: 4228.48 4057.66 -170.82 -4.0 -14.9
Russell 2000: 1957.35 1899.83 -57.52 -2.9 -15.4
This article was printed from TradingSig.com