Stock index futures point to a slightly higher open Thursday with investors preparing to parse any soundbites from Jackson Hole that might telegraph Jay Powell’s speech the next day.
“The market discount has notably shifted in the past couple of weeks in anticipation of an expected hawkish tone from Chair Powell,” ING said. “The rationale for this is the growing realization that central banks are ready to home in on taking underlying inflation down as best they can, even at the cost of macro weakness. And how do they do that? They tighten financial conditions. In fact that’s all they can really do.”
“But here’s the issue – even though the Fed has raised rates by 225bp since March, US financial conditions are back to where they were in February (before the first Fed hike).”
On the economic front, weekly jobless claims arrive, with economists expecting a small rise to 253K.
The revision of Q2 GDP comes at the same time with the headline number forecast to narrow to -0.8% from -0.9%.
“Do markets care about initial or revised data?” UBS chief economist Paul Donovan wrote. “Markets are slaves to novelty; for bonds and currencies the initial number matters, even if it is always wrong, if policy markets focus on short-term data. But equity earnings depend on reality, not inaccurate statistical reports, and so revised data is more important there.”
Among active stocks, Telsa is up slightly after its 3-for-1 stock split and Nvidia is under pressure on concerns about quarterly guidance.