Head of Fed Speaking at Jackson Hole Made US Indices Grow | R Blog
Last Monday I promised that the symposium at Jackson Hole would make the week in the market quite thrilling. Apparently, I was right. The speech delivered by Jerome Powell, the head of the US Federal Reserve system that most analysts had anticipated, influenced stock indices.
Give me a couple of minutes, and I’ll tell you what exactly was said at the symposium and how those words influenced the indices. Moreover, Maksim Artyomov will treat you on a fresh tech analysis.
The head of the Fed admits winding up the stimulation this year
On August 27th, at Jackson Hole the annual economic Forum organized by the US Fed was held. As I’ve said, many participants waited for Jerome Powell to speak.
Main statements of Powell’s speech
- It’s not decided yet when monthly buyback of bonds for $120 billion will be cut down on. The Fed is still discussing the issue.
- The main factors that influence the decision are economic and healthcare risks.
- The economy has reached the level where it doesn’t need so much help from the Fed.
- Buyback of assets should slow down this year already.
- The inflation level exceeds the desired 2% but this is temporary.
- The labor market demonstrates noticeable progress but it needs time for a full recovery.
US indices reached their highs
On Friday, August 27th, the S&P 500 (SPX) closed the trading session at 0.88% or 4509.37 points. This means it renewed an all-time high. NASDAQ Composite (IXIC) managed to demonstrate an even more significant increase by 1.23% to 15129.5 points. This is also an all-time high.
On the same day, the Dow Jones Industrial Average (DJI) grew by 0.68%, reaching 35454.81. This growth was decent yet didn’t beat the record of August 16th. As you remember, that time it reached 35624.35.
Tech analysis of US indices by Maksim Artyomov
S&P 500 is forming another ascending wave, renewing the highs. I suppose that the next goal will be 4600, and a breakaway here will support further growth.
The growth is supported by the 200-days Moving Average that is below the chart and growing. The quotations are likely to keep growing inside the ascending channel.
NASDAQ Composite on the whole behaves like most American stock indices. Renewing the highs, the quotations go on with the ascending wave inside an ascending channel. The aim of growth is 16,000.
The growth is supported by the 200-days Moving Average that remains below the chart and keeps growing. Also, after the renewal of the highs, a minor correction is possible before heading for 16,000.
Dow Jones Industrial Average
On D1, Dow Jones is forming another ascending wave, heading for the local high. The aim of the growth is the resistance level near 35,607.
Later on, this level might be broken away. As long as the quotations keep trading under the 200-days MA, after the breakaway and the renewal of the highs the dynamics will remain positive inside the ascending channel.
Many investors and analysts were anticipating the speech of the Fed head Jerome Powell. At the symposium at Jackson Hole he didn’t exclude the probability of cutting down on stimulation measures in 2021 already. Powell’s words made stock indices grow. Moreover, S&P 500 and NASDAQ Composite managed to renew their all time highs.
What else to read about stock indices on R Blog?