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Economic Calendar - Top 5 Things to Watch This Week

Economy Aug 23, 2020 05:55AM ET
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© Reuters.

By Noreen Burke

Investing.com - Investors will be on the lookout for any hints this week from the Federal Reserve about how much it could do to help the recovery from the coronavirus pandemic. The economic calendar features updates on durable goods and home sales. Political developments will remain on the radar as the Republican convention kicks off on Monday, with Congress still locked in a stalemate about what measures should be included in the next round of fiscal stimulus. It could be another big week for stock markets after the S&P 500 recouped all its coronavirus-driven losses and ended at Friday at record highs. Meanwhile, energy traders will be closely following two tropical storms heading into the Gulf of Mexico. Here’s what you need to know to start your week.

  1. Fed Chair Jerome Powell takes center stage at (virtual) Jackson Hole

Investors will be looking for indications on how the Fed will try to manage the long-term economic recovery in a speech by Chairman Jay Powell on the opening day of the annual Jackson Hole conference on Thursday.

Since the global financial crisis, Fed chiefs have used their keynote speech at the Jackson Hole conference - being held virtually this year for the first time in nearly four decades because of the pandemic - to signal important shifts in monetary policy or the economic outlook.

A major question - particularly ahead of the Fed's September policy meeting - is whether the central bank will shift its inflation targets to an average, which would allow inflation to run higher before interest rates are raised.

Investors may also be on the lookout for signs that the Fed is looking at additional ways to bolster the economy should Congress fail to deliver a new pandemic relief package.

  1. Economic data to point to choppy recovery

The U.S. is to release data on July durable goods orders on Wednesday which is expected to show growth remained solid last month as the economy reopened.

Market watchers will also be keeping an eye on figures for new and pending home sales on Tuesday and Thursday, respectively. Real estate has been one of the bright spots of the economy during the pandemic with mortgage rates near record lows.

The economic calendar also features updates on personal income and spending, consumer confidence and consumer sentiment, along with Thursday’s weekly look at initial jobless claims. Claims unexpectedly rose back above the 1-million-mark last week’s report showed, a setback for a struggling U.S. job market.

  1. Republican convention begins

Markets will continue to follow developments in Washington as the Republican nominating convention for President Donald Trump gets underway on Monday. The convention is expected to culminate in a live acceptance speech from Trump on Thursday night on the South Lawn of the White House.

At last week’s Democratic convention speaker after speaker characterized Trump’s four years in office as chaotic. Trump countered on Friday that Democrats, not he, would bring chaos to the United States if Joe Biden wins the White House in November.

The conventions are happening against a background of a stalemate in talks between House Democrats and the White House over the next coronavirus aid bill as about 28 million Americans continue to collect unemployment checks.

  1. Another big week for stocks?

Last week was a big week for stocks, with the S&P 500 and Nasdaq both closing at record highs on Friday after the S&P 500 recouped all its losses caused by the coronavirus-driven slump. The Dow is still 6% below its all-time high in February.

Spurred by Fed buying of assets, stocks have rallied to record highs, while bond yields have been near record lows.

This week investors will await further clarity from the Fed on what more it can do to help the recovery, including details on possible changes to how it targets inflation.

  1. Twin storms in Gulf of Mexico to disrupt oil production

On Saturday oil producers began to shut down some crude production ahead of tropical storms Laura and Marco that are forecast to hit the Gulf of Mexico in coming days.

Storms Marco and Laura are poised to become hurricanes and make back-to-back landfalls along the central Gulf Coast by mid-week. It is rare to have two simultaneous storms in the region, but neither storm is expected to become a major hurricane, and their potential tracks cover a wide area of the Gulf Coast, said forecasters.

U.S. Gulf of Mexico offshore wells account for 17% of total U.S. crude oil production and 5% of total U.S. natural gas production. The region along the Texas to Mississippi coasts also accounts for 45% of total U.S. petroleum refining capacity.

--Reuters contributed to this report

Economic Calendar - Top 5 Things to Watch This Week
 

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Comments (9)
Adil Khan
Adil Khan Aug 23, 2020 10:59AM ET
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So is the storm good for natural gas prices ? Correct .
Nico Navas
Nico Navas Aug 23, 2020 10:59AM ET
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Yes sir
David Merrifield
David Merrifield Aug 23, 2020 10:59AM ET
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Yes, no only because of nat gas production in the gulf but expect nuclear power stations to shut down during tropical storm activity.
Indiana Jones
Indiana Jones Aug 23, 2020 10:59AM ET
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I’d be careful on nat gas, as any supply disruption would be short-lived cuz these aren’t huge storms. Plus, it’s tough to tell if the storms are already priced in.
Emmanuel Russell
Emmanuel Russell Aug 23, 2020 10:53AM ET
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we see a red week coming up
Nico Navas
Nico Navas Aug 23, 2020 10:53AM ET
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For energy sticks Not tech
Indiana Jones
Indiana Jones Aug 23, 2020 10:53AM ET
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High vol coming by Thursday w Powell. Bought cheap (low VXX) short term portfolio insurance using SPY and QQQ at the money puts. Not perfect hedges, but will work well enough. Breadth is so narrow (esp AAPL) that even a small dip in FAANGM will cause a lot of pain, plus AAPL/GOOG App Store lawsuits are scary so there is headline risk.
John Snoberger
John Snoberger Aug 23, 2020 10:48AM ET
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Wall street vs Main street?
Jay West
Jay West Aug 23, 2020 10:48AM ET
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Any thoughts on banks like BAC this week?
Jay West
Jay West Aug 23, 2020 10:48AM ET
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“is whether the central bank will shift its inflation targets to an average, which would allow inflation to run higher before interest rates are raised.”Can someone knowledgeable please explain? Any insight is appreciated.
John Snoberger
John Snoberger Aug 23, 2020 10:48AM ET
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2% target
Carlos Perez
Carlos Perez Aug 23, 2020 10:11AM ET
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Im on spy puts expecting a sell off for tomorrow
Carlos Meza
Carlos Meza Aug 23, 2020 10:11AM ET
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Hi carlos .. i have a question .. im new in this .. but i love it .. can you explain me why did you buy puts on spy ? Thanks !!
Indiana Jones
Indiana Jones Aug 23, 2020 10:11AM ET
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I suspect he bought them for the same reason as many of us. We think the market is headed down because while we’re hitting new highs, 2/3 of stocks in SPY and QQQ were down this past week, thus upside breadth is narrow (bearish). We want to protect our portfolios with “insurance” using SPY puts. Also, VXX is low (complacency level is high) so buying options is relatively cheap insurance vs when markets are turbulent.
Jay West
Jay West Aug 23, 2020 10:11AM ET
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Why expect a selloff if there essentially was one last with in the S&P for 2/3rds of the market? Last week was the week to have puts. Possibly some selling in tech for profit taking, but the rest of the market 2/3rds should bounce. Seems more logical.
Hung Nguyen
Hung Nguyen Aug 23, 2020 10:11AM ET
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Green week?
Nick Burns
Nick Burns Aug 23, 2020 10:11AM ET
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side ways
Emmanuel Russell
Emmanuel Russell Aug 23, 2020 10:11AM ET
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Red week!!
Dietmar Stahl
Dietmar Stahl Aug 23, 2020 8:08AM ET
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There should have been a freeze of layoffs same as it was for rent or mortage. Means everything should had stopped and also be returned the way it was and same to jobs. All the employers must return the same workers as it was before only then a shut down works.
Cob Pizza
Cob Pizza Aug 23, 2020 8:08AM ET
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A lot of the businesses that did layoffs were small business. Effectively, your proposal would've quicken the closure of many businesses
Cob Pizza
Cob Pizza Aug 23, 2020 8:08AM ET
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A lot of the businesses that did layoffs were small business. Effectively, your proposal would've quicken the closure of many businesses
Cob Pizza
Cob Pizza Aug 23, 2020 8:08AM ET
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A lot of the businesses that did layoffs were small business. Effectively, your proposal would've quicken the closure of many businesses
Rhuephus Phuche
BoojumSnark Aug 23, 2020 8:08AM ET
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Cob Pizza  Isn't 3 identical posts a bit much ???
Kaveh Sun
Kaveh Sun Aug 23, 2020 8:08AM ET
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Rhuephus Phuche this lame app sometimes dont post. U hit submit, u see nothing, u hit submit again, still nothing.
Mahmud Shehu
Mahmud Shehu Aug 23, 2020 6:33AM ET
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Another lame week ahead.
The Big Fish
The Big Fish Aug 23, 2020 6:33AM ET
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well, I'm hoping Jerome says something that triggers a big gold price move
Ronald Warren
Ronald Warren Aug 23, 2020 6:33AM ET
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Be patient. Powell has a god complex. The Lord will deal with it accordingly. It could come in the form of a bad decision like in Feb when Powell cut the FED pump and markets started to tumble. And of course, corona finished the job. Gold is now primed for a massive climb on the next market dump. When, is the big question.
 
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