A&G Weekly Market Update Eclipse Edition 🌗🌘🌑🌒🌓🌔 August 25 2017
Some Key Insights from this past Week
- The Federal Reserve's (Fed) annual Jackson Hole Symposium was this week. It took place from August 24-26. This gathering of central bankers has taken place annually since 1978 and is closely watched by markets. While maybe not as exciting as Monday’s eclipse, this meeting has been significant at times, with central banks using the conference to signal upcoming changes to policy.
- The stock markets may be more susceptible to volatility this month and next month. Traders are on vacation and won't be back till after Labor Day and we’re starting to enter a slower period of news. These circumstances could make markets more volatile to things like political discussions (budget, debt ceiling), geopolitical factors (North Korea).
- Hurricane Harvey is impacting oil and gas prices. Harvey moved from a tropical storm to a category 2, and a possible 3 when it makes landfall today. Oil prices initially jumped, but have given back some of those gains. As these refiners shut down, this could result in excess oil inventory, which could lead to lower oil prices. How long any additional oil supply will last will be a function of how long refiners are closed, which is anyone’s guess.
- Debt ceiling negotiations may be difficult. Most of us have memories of 2011 when we first heard the phrase “debt ceiling”. That led to Standard & Poor's cutting the U.S. credit rating. Those events drove the S&P 500 down 19.4% between April and October of that year. I don't expect a repeat. It should be a relatively smooth resolution this time.