Jackson Hole central bank annual meeting opened: "the eve of the war" Wall Street actually took the initiative?

By    26 Aug,2022

The Jackson Hole annual meeting of global central banks, which has received much attention from global investors, has opened this Thursday (Aug. 25) local time. Although the most industry attention to the Fed Chairman Powell's speech, was scheduled to come out at 22:00 GMT tonight, but last night was suppressed for a long time the U.S. stock and bond markets, but seems to have set off a wave of small outbreaks in advance.

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The S&P 500 index rose 58.35 points on Thursday, closing 1.4% higher to 4199.12 points, the biggest gain in nearly two weeks, according to the line data. The tech-focused Nasdaq Composite Index rose 207.74 points, or 1.7 percent, to 12,639.27. The Dow Jones Industrial Average rose 322.55 points, or 1 percent, to 33,291.78.


U.S. Treasury yields, on the other hand, retreated from their highs, with the 10-year U.S. bond yield dipping to 3.023% from 3.105% on Wednesday, but still holding above the 3% mark. In other maturity yields, the 2-year U.S. bond yield fell 2.3 basis points to 3.378%, the 5-year U.S. bond yield fell 8.1 basis points to 3.158%, and the 30-year U.S. bond yield fell 1.4 basis points to 3.244%.

In the background of the recent U.S. stock and bond markets both under pressure, the rally achieved by the market overnight can be quite rare. This also seems to indicate that despite the industry's expectation of a hawkish stance on tonight's Fed Chairman Powell's speech, the stock and bond market bulls are still unwilling to easily give up their resistance and give in.


Despite expectations of a Fed rate hike still heating up, U.S. stocks rallied against the trend last night Market pricing shows investors now expect the Fed to raise borrowing costs to 3.7% by February 2023, up from expectations of 3.3% in early August. The Fed's current federal funds rate range is 2.25%-2.50%.


In terms of market action and volume, the S&P 500 closed near its intraday high overnight, but volume was again below average. This follows total trading volume of just 8.8 billion shares on Wall Street exchanges on Wednesday, the lowest level of the year so far and 26% below the average daily volume so far in 2022.


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