US stocks rallied on Wednesday in anticipation of the Jackson Hole symposium, which starts this Thursday and ends on Saturday. To be more specific, the S&P 500 was up 0.24%, thanks to the gains in the energy sector brought by the surge in Treasury yields.
In addition, bearish investors were lacking in the market, said BCA Research chief strategist Irene Tunkel. "Pullbacks like last week's are becoming shallower and shallower as more people buy the dip. There is a very, very strong buy-the-dip mentality," she noted.
Apparently, improved company profits, increased vaccinations and support from monetary policy helped restore the mood after a bout of anxiety in the face of rising delta cases. But potential tapering is a key twist that traders are keen to get more clarity on, as it would drive the direction of the markets. Fortunately, this may be answered during the speech of Fed Chairman Jerome Powell at the Jackson Hole symposium on Friday.
Fiona Cincotta, an analyst at City Index, said investors can not help but doubt whether the Fed will announce a cut, especially with the worsening situation on COVID-19.
Latest data also show that US orders stalled unexpectedly in July, marking a pause in a multi-month capex ramp-up.
"Visibility into getting enough product to satisfy demand is a challenge. Managing one's own rising cost pressures and labor shortages are another matter," said Bleakley CIO Peter Boockvar.
Other important events for this week are:
- Bank of Korea policy decision and briefing by Governor Lee Ju-yeol (Thursday);
- Jackson Hole symposium (from Thursday to Saturday);
- data on US GDP and jobless claims (Thursday);
- July report on US personal income and spending (Friday).
