Markets: quick review of the last, choppy, week

Market Pulse.

U.S. equities were on track to finish higher for the week until China unveiled a new round of retaliatory tariffs and President Trump vowed to respond, unnerving markets. In this new episode of escalating trade tensions, China announced that it would impose tariffs ranging from 5% to 10% on $75 billion of U.S.goods in two batches, effective on September 1st and December 15th, including a 25% tariff on U.S. cars.

The S&P500 SPX finished Friday down 2.59%, concluding the volatile week down 1.4%. The index is now down 4.5% for the month of August and 6.0% lower from the record high it reached in July. The Dow Jones Industrial Average fell 2.4% on the day and finished down 1.0% for the week.

At the annual central bank summit in Jackson Hole, Fed Chairman Powell left the door open for another rate cut when the committee meets next month, acknowledging the risks to global growth from trade uncertainty.

An inverted yield curve (when long-term rates are below short-term) continues to cast a shadow on stocks amid fears that it’s signaling an imminent recession.

Long-term rates have dropped below short-term rates in small part because the outlook for growth has waned, but also in large part because negative rates abroad have attracted buyers of U.S. Treasuries pushing yields lower than they otherwise would be.

Trying to find new supports for the SP500, the rounded 2,820 seems important as during all August its price is bouncing in that level. If the plunge continues this week, the SMA200 average is powerful support for this week. Only Trade War' good news could convert SPY in a good "buy-the-dip" trade.

Futures Markets for today.

After a whippy week, U.S. equity futures are picking up where they left off last week, amid growing concerns over the U.S.-China trade war. S&P 500 futures (/ES) initially opened 1.0% lower last evening after President Trump stated at the G-7 summit in France that American companies were ‘hereby ordered’ to look for alternatives to China and that he could declare the escalating U.S.-China trade war as a national emergency. Futures turned positive after Mr. Trump said China had called U.S. trade officials and asked to get back at the table for talks.

Economic data out this week includes the durable goods report for July, the Consumer Confidence survey for August, and the Bureau of Economic Analysis is expected to revise down its initial estimate of second-quarter U.S. GDP growth to 1.9%, on Thursday.

Finally, personal income and outlays data, along with Chicago PMI is due out on Friday. There are just a few earnings left for the second-quarter with Best Buy (BBY), Dollar General (DG), Dollar Tree (DLTR), Burlington Stores (BURL), Ulta Beauty (ULTA) and Campbell's Soup (CPB) all reporting this week. As of this writing, U.S. crude oil futures (/CL) are 0.3% higher near $54.80 a barrel and S&P 500 futures (/ES) are 0.7% higher near 2875.

(Text is taken from TradeWise Market Blog.)

Main world economic events for this week August 26 to 30th. Keep an eye in U.S. Gross Domestic Product (Thursday) and the PCE Index (Friday), the favorite inflation indicator for the Fed. Thanks to @econoday.