Friday August 26th

U.S. stock index futures were little changed Friday absorbed new inflation data ahead of Federal Reserve Chair Jerome Powell’s speech in Jackson Hole, Wyoming. Futures tied to the Dow Jones Industrial Average advanced 70 points, or 0.21%. S&P 500 futures climbed 0.05%, and Nasdaq 100 futures gained 0.05%. Nevertheless, all the major averages are on pace for their second straight down week. The Dow is on track for a 1.2% decline. The S&P 500 and Nasdaq Composite are heading to slightly smaller declines of 0.7% and 0.5%, respectively. All eyes are on Powell’s widely anticipated 10 a.m. ET speech at the central bank’s annual symposium in Wyoming. Traders digested one of the Fed’s favorite inflation measures, the personal consumption expenditures data, which on Friday showed price increases eased in July. Investors are hoping for new guidance about how the Fed will act this autumn, but expectations are lower, with many expecting Powell to reiterate the Fed’s promise to slow inflation by raising interest rates. Opinion’s divided on whether the Fed will bump rates by half a percentage point or three quarters of a point at its next policy meeting in September. “Recent US economic data has been encouraging, improving the likelihood of the Fed achieving a soft landing. But we think markets may have gotten ahead of themselves in pricing in this scenario,” UBS’ Global Wealth Management Chief Investment Officer Mark Haefele wrote in a Friday note. The moves followed an up day for the major averages in which the Dow jumped about 300 points, and the S&P 500 gained 1.4%. The Nasdaq Composite was the outperformer, advancing 1.7% as a pullback in yields helped tech shares. The Fed’s favorite inflation measure jumped less than expected in July. Personal consumption expenditures, one of the Federal Reserve’s favorite inflation indicators, slipped on a monthly basis in July and was up less on the year than anticipated. The inflation measure fell 0.1% in July and was up 6.3% on the year, the Bureau of Economic Analysis reported Friday. It was expected that the PCE index would be unchanged on a monthly basis in July and up 6.4% on the year. Shares in the Asia-Pacific rose on Friday as investors look ahead to Fed Chair Jerome Powell’s speech at Jackson Hole later stateside. Chinese tech stocks with listings in both Hong Kong and the U.S. were higher. It came as the Wall Street Journal reported that Washington and Beijing are close to reaching an agreement that would allow U.S. accounting regulators to inspect audit records in Hong Kong. Delisting fears have plagued U.S.-listed Chinese companies in recent months because of the audit dispute. In Hong Kong, Alibaba shares rose 2.13% and Baidu gained 2.54%. That compared to a 1.01% rise to 20,170.04 in the wider Hang Seng index. Japan’s Nikkei 225 added 0.57% to 28,641.38 while the Topix increased 0.15% to 1,979.59. The Kospi in South Korea advanced 0.15% to 2,481.03 and the Kosdaq was fell 0.61% to 802.45. Mainland China’s Shanghai Composite ticked 0.31% lower to 3,236.22, and the Shenzhen Component lost 0.366% to 12,059.71. Oil prices rose on Friday as fresh U.S. data lowered recession fears, although an upcoming speech from the U.S. Federal Reserve chairman capped further gains. Brent crude futures climbed $1.66, or 1.7%, to $101.60 a barrel, while U.S. West Texas Intermediate (WTI) crude futures rose $1.33, or 1.4%, to $93.85. Gold prices were subdued on Friday, as investors adopted a cautious stance ahead of U.S. Federal Reserve Chair Jerome Powell’s speech at a key central bankers’ meeting, which will be vetted for guidance on interest rate hikes. Spot gold edged 0.6% lower at $1,747.38 per ounce. U.S. gold futures were down 0.6% at $1,760.20.