The Week on Wall Street
Stocks notched a solid gain as dovish comments from Federal Reserve officials boosted the market’s recovery from early August lows.
The Standard & Poor’s 500 Index rose 1.45 percent, while the Nasdaq Composite added 1.40 percent. The Dow Jones Industrial Average picked up 1.27 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, gained 2.98 percent.1,2
Dovish Week
Stocks started the week strong, rallying after Wall Street welcomed dovish comments from Minneapolis Fed President Neel Kashkari. The S&P 500 and Nasdaq each posted gains on Monday–the 8th consecutive winning session. The Dow rose for the 5th session in a row.3,4
From there, markets traded in a narrow band until Wednesday afternoon when minutes released from the July 30-31 FOMC Meeting revealed more dovish comments. On Thursday, stocks dipped ahead of Fed Chair Jerome Powell’s annual Jackson Hole, Wyoming, speech.5,6
Well-received comments from Powell on Friday boosted markets, with all three averages closing higher.7
“The Time has Come”
The Fed’s annual symposium for global central bankers started Friday morning with Fed Chair Powell’s much-anticipated speech. Citing the risk of the labor market cooling even further, he said, “the time has come for policy to adjust.”
Investors responded favorably, with the remaining question being how significant a rate cut might be. Powell kept that door open, adding that “the timing and pace of rate cuts will depend on incoming data, the evolving outlook, and the balance of risks.”8
Weekly Riddle
Anna, a supermarket clerk, has not slept during any of the past six nights, yet she is not tired. How can this be?
Last week’s riddle: It stands higher than any tree, yet it seemingly takes forever to grow, and you can’t see its roots. You won’t have to shimmy up any trunk to reach its top. What is it?
Answer: A mountain.
John Dombroski Jr. may be reached at (480) 991-1055 or [email protected]
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