With the economic calendar relatively on the quiet side this
week, attention will be on Ben Bernanke as the Fed's annual Jackson
Hole meeting gets underway. The market will be looking for clues in
Bernanke's speech this Friday about another round of bond
purchases, setting the stage the stage for the September 12/13 FOMC
meeting. Mario Draghi, the European Central Bank president, will
also be at Jackson Hole and his speech on Saturday also be closely
Investors are justifiably ambivalent about the odds of more QE
at next month's Fed meeting. Minutes of the last meeting appeared
to show support for more monetary accommodation. But the economic
ground realities at the time of that FOMC meeting on July 31/August
1 were somewhat different from what transpired afterwards. While
most economic indicators are still no different now than how they
have been in the last few months, but the monthly retail sales and
jobs data did show some signs of renewed health.
This has raised doubts in investors' minds that the Fed may not
come through after all. It is this backdrop that has put the
spotlight on Bernanke's speech next Friday at the Fed's annual
Jackson Hole meeting. The expectation is that Bernanke's speech on
Friday will provide more color on the Fed's latest thinking about
the economy, which will help set expectations for next month's FOMC
meeting. The Fed's Beige Book report on Wednesday will also be
relevant to this discussion.
Beyond a temporary psychological boost, I am not convinced of
the relevance of more Fed support to the U.S. economy. Broad
measures of liquidity and interest rates already remain quite
favorable, limiting the effectiveness of more easing measures. As
such, more QE would do little more than provide a short-term
psychological high to the market.
???In corporate news, investors will be handicapping the impact
) patent victory over Samsung in the smart-phone market. In
addition to the obvious positive boost to Apple, the development
may be beneficial to
) market shares. On the earnings front,
) missed earnings and revenue expectations and guided lower.
APPLE INC (AAPL): Free Stock Analysis Report
MICROSOFT CORP (MSFT): Free Stock Analysis
NOKIA CP-ADR A (NOK): Free Stock Analysis
TIFFANY & CO (TIF): Free Stock Analysis
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