The CME Group’s FedWatch, meanwhile, is counting on a 68% chance of a 75 basis point rate hike from the Fed at its next policy meeting in September, up from just 55% a week ago and just 28% at the start of the month.
Central banks around the world, aside from the People’s Bank of China, are also following Powell’s aggressive stance, with European Central Bank’s Francois Villeroy de Galhau calling for a “significant” rate hike in September as the region’s economy flirts. with both an impending energy crisis and the potential for recession.
Recession in Britain is also a growing risk, according to Goldman Sachs economists, who called for a contraction that would begin in the final three months of the year and extend through most of 2023, amid a rise in housing energy costs that are discretionary spending and potentially lead to a consumer debt crisis.
The bleak backdrop for stocks entering the final week of trading in August is leaving markets behind, with Europe’s Stoxx 600 trading 0.94% lower in early trading in Frankfurt after dropping 1. 85% for the MSCI ex-Japan index in Asia and down 2.66% for the Nikkei 225 in Tokyo.
On Wall Street, futures pegged to the S&P 500 point to a 39-point drop in the opening bubble, while those on the Dow Jones Industrial Average are priced at a 270-point downward move. Futures linked to the technology-focused Nasdaq point to a dip of 163 points.
2. — Week ahead: Job data in focus as headwinds loom in September
Friday’s jobs report points to a quiet week for earnings and data releases as they head into the Labor Day long weekend and the start of the market’s historically toughest month.
The labor market was the best-performing sector for the economy this summer, with 528,000 new job openings in July, pushing the overall unemployment rate to a nearly five-decade low of 3.5%.
However, that growth rate is likely to slow sharply in August, with forecasters looking to create a total of 285,000 new jobs for the world’s largest economy. However, wages are likely to rise as more than 11 million open positions remain unfilled, which could test the market’s complacency regarding easing consumer price pressures. Economists expect the average hourly wage to be 5.3% higher than last year and 0.4% from July.
In addition to jobs, investors will get updates on the mortgage market on Wednesday with the MBA’s weekly review, with a key reading of euro-zone inflation on the same day.
On the Profit Front, Best Buy
(HP BBY) (Hewlett Packard Enterprises HPQ) ( and Broadcom HPE) ( are all scheduled to report this week, while Bed Bath & Beyond AVGO) ( is expected to unveil its long-awaited turnaround plans ahead of the jobs data on Friday. BBBY)
3. — Oil prices amplify profits on supply problems
Global oil prices rose higher on Monday, rising in the face of both a strengthening US dollar and declining growth prospects in the world’s largest economies, amid ongoing concerns about OPEC’s production cuts.
Saudi Arabia, the cartel’s most influential member, has hinted at production cuts amid what the energy minister has described as “chaotic” global markets and the imminent addition of Iranian crude oil, which could hit the markets in the coming months. as talks between the US, the EU and Tehran on the future of its nuclear program continue to progress.
The deadly turmoil over the weekend in Libya, a key supply-side OPEC state, added to concerns about short-term disruptions that could keep prices high.
WTI crude oil futures for October delivery were up 56 cents at $93.62 a barrel, while Brent contracts for the same month, the global price benchmark, contributed 28 cents to trade at $101.27 a barrel. .
4. — Bitcoin Drops Back Below $20,000
Bitcoin prices plunged back below $20,000 on Monday, following a Friday rally for the dollar and a rise in government bond yields, thanks to Fed Chair Jerome Powell’s aggressive address in Jackson Hole.
Powell’s speech, which raised the likelihood of another 75 basis point hike in the Fed Funds benchmark rate next month, brought the dollar close this weekend from the recent two-decade highs in foreign exchange markets, adding downward pressure. exercised on assets such as gold and digital coins, which pay their investors no interest.
Additional pressure was linked to reports that creditors in debt as a result of the 2014 collapse of the Mount Gox crypto exchange will begin receiving payments from administrators in Japan, a move that could see 137,000 new bitcoin hit the market — and possibly sold – in the coming weeks.
Bitcoin prices last traded 1.59% higher during Monday’s session at 19,881.70 each.
5. — Artemis I is ‘Go For Launch’
NASA will begin its first moon-targeted rocket launch in more than 50 years on Monday with the launch of Artemis I, a mission composed of the government’s next-generation Space Launch System and an unmanned Orion capsule.
The Artemis I mission will launch at 8:33 a.m. Eastern Time from Kennedy Space Center in Cape Canaveral, Florida, and will take off for a test flight that will take the combined spacecraft around the moon and back to Earth over the next six weeks. .
More than a decade in the making, the $37 billion program aims to eventually return American astronauts to the lunar surface for the first time since Gene Cernan, the twelfth and last man to walk on the moon, in December. 1972.
“This is a great twist in history because we’re going back to the moon after 50 years, to stay, to learn to work, to create, to develop new technologies and new systems and new spacecraft to go to Mars.” .” said NASA administrator Bill Nelson.