Last week the us stock indexes demonstrated negative dynamics, while the DAX closed in positive territory. Thus, the U.S. index of blue chips Dow Jones for a week has decreased on 0,85%, the index of wide market Standard & Poor’s 500 has decreased on 0,67%, and the indicator of high-tech industries Nasdaq Composite declined by 0.37%; Germany shares rose 0.41%.
Last week the focus of investors was the speech of fed chair Janet Yellen in Jackson hole, which mostly turned out to be hawkish, despite a mixed reaction in the market. So, she said that against a backdrop of continued positive momentum in the labor market and improve economic activity and inflation in the country, the arguments in favor of raising interest rates has increased significantly in recent months. In the end, according to interest rate futures, the probability of monetary tightening in September had jumped to 33%. In addition, last week there were performances by a number of fed officials and their statements for the most part also was in favor of raising interest rates by the regulator due to the fact that the labor market is close to achieving full employment.
While the Chairman of the fed Stanley Fischer does not exclude the two-time monetary tightening in the current year. It is worth noting that recently the fed before the meeting often make hawkish statements, but later take the opposite action in connection with which the regulator undermined the confidence of investors. We continue to believe that the fed decides to raise rates only at the December meeting after the election of the President of the United States.
Of important macroeconomic statistics during the past week in the United States published revised GDP for the second quarter which rose by 1.1%, which was in line with analysts ‘ expectations. In addition, orders for durable goods in July rose sharply by 4.4% against the forecast of +3.3%, which also pleased the market participants. From the European data it is worth noting the final German GDP, which in the second quarter rose 3.1% m/m and revised GDP in the UK, adding in the second quarter to 0.6% QoQ.
This week market participants should pay attention to the important Friday a block of data on the US labor market in August, the results of which will have a significant impact on the decision to raise interest rates at its September meeting. According to our expectations, nonfarm payroll employment increased by 164 thousand, while the unemployment rate fell from 4.9% to 4.8%.
In addition, in the United States will be published no less important data on personal income and spending of U.S. citizens in July. Analysts predict that the figures increased by 0.4% and 0.3%, respectively. In the Euro area and Germany should pay attention to the statistics the preliminary consumer price index for August. Thursday China will release data on indices of business activity in the industry from NBS and Caixin for August, which may affect the dynamics of world markets. If the data is worse than expected, the people’s Bank of China may subsequently take additional measures of monetary stimulation of economy.
Also this week there will be performances by a number of fed officials, in particular, Neil Kashkari, Jeffrey Lacker of, and Eric Rosengren. The season of corporate reporting is almost complete, but you should pay attention to the financial results of food manufacturer Campbell Soup and it companies Salesforce.com. It is expected that the company will report earnings per share of $0.49 and $0,22, respectively.
From a technical standpoint on the daily chart of the S&P 500 index continues to consolidate in a narrow sideways 2148-2195 points. Stochastic lines are still pointing South, but has reached oversold, so it is expected the suspension of local decline.
The German DAX is trading within the ascending channel where the price is near its lower bound. Stochastic lines are in a buy position, so the growth potential remains.