Stocks Struggle in Cautious Trading Before Powell: Markets Wrap

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(Bloomberg) -- European stocks and US futures struggled for direction as a cautious tone dominated markets before a speech from Federal Reserve Chairman Jerome Powell that will be studied for clues on the interest-rate outlook.Most Read from BloombergNYC’s Most Exciting New Fine Dining Restaurant Is in a Subway StationMore People Call in Sick on August 24 Than Any Other DayNasdaq 100 Drops 2% as Yields Rise Before Powell: Markets WrapTrump Surrenders in Georgia on 2020 Election Probe ChargesModi

Energy and mining shares outperformed a flat Stoxx 600 Europe index as crude oil and iron ore prices climbed. US contracts were steady after tech stocks led declines on Wall Street on Thursday, wilting in the face of rising Treasury yields. The Nasdaq 100 dropped 2.2%, its worst day in three weeks.

Investors are keeping a close eye on the annual gathering of top central bankers in Jackson Hole, Wyoming — where Powell is scheduled to deliver a speech at 10:05 a.m. Washington time. The Fed chief will likely use his platform to outline how officials will assess whether rates should go higher and determine when it’s time to start cutting them.

“If Powell focuses on data dependency, that ought to help 10-year yields stabilize,” said Dennis DeBusschere, founder of the New York-based research firm. That would also provide a “tailwind” to the growth-versus-value trade, he noted.Another topic that has surfaced on Wall Street over the past few days is whether Powell will address the abstract, almost elusive number that many refer to as r-star. That’s a sort of “Goldilocks” rate that neither stimulates nor restricts economic growth.

 

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Asia Stocks to Follow US Drop Before Powell Speech: Markets WrapAsian stocks were set to follow a selloff on Wall Street, with bond yields rising as traders comb through remarks from a slew of Federal Reserve officials and await Jerome Powell’s speech for clues on the interest-rate outlook.
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