- The Dow Jones Industrial Average climbed 83.48 points, or 0.3%, to 28,331.92.
- The S&P500 SPX gained 35.11 points, or 1.02%, to 3,478.73.
- The Nasdaq Composite IXICadded 198.59 points, or 1.73%, to 11,665.06.
The S&P 500 is now making its fourth straight record closing high as investors look through the coronavirus spread and bank on large-cap momentum stocks on the back of ongoing stimulus.
Additionally, the Nasdaq also set an all-time closing high, its 39th year-to-date, compared with a total of 31 reached in all of 2019.
The Dow remains the laggard of the pack which struggles for air while still 4.1% below its pre-COVID record, and 0.7% off showing a year-to-date gain. However, on the day ahead of the Jackson Hole, the index managed a modest advance.
Consequently, the Dow Jones Industrial Average added 83.48 points, or 0.3%, to 28,331.92, the S&P500 put on 35.11 points, or 1.02%, to 3,478.73 and the Nasdaq Composite gained 198.59 points, or 1.73%, to 11,665.06.
As for data, July durable goods rose 11.2% for the month on month data for the third consecutive monthly rise in both headline and core orders which is positive news for the sustainability of the recovery.
Jackson Hole in focus
Meanwhile, for a preview of the Jackson Hole showdown, analysts at ANZ Bank explained that Powell’s speech on Thursday is expected to give guidance on the Fed’s review of monetary policy strategy.
- Expectations are looking for the statement on the long-run objectives of monetary policy to be updated at the September FOMC meeting and an endorsement of an average inflation target.
- Whether and how policy tools might be adapted to achieve an average inflation target is open to speculation.
- For example, QE could become conditional on macro and inflation developments, or date dependent. But the upshot is: adapting an average inflation target would be seen as undoubtedly dovish, meaning looser monetary policy for longer.
- An average inflation target would mean that the Fed would be willing to tolerate an overshoot in inflation to make up for an undershoot that had occurred over a certain (limited) period of time.
- In the current environment, this would anchor inflation expectations, lower real interest rates, and lead to policy being expansionary for longer than otherwise.
S&P 500 levels
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