Coffee With Greta: Jackson Hole Selloff Continues
DJIA Futures: -218 (-0.7%)
SPX Futures: -29 (-0.7%)
NASDAQ Futures: -111 (-0.9%)
Good morning friends!
Futures are lower as traders continue to dump risk assets after hawkish comments from the Fed Chair on Friday.
Let’s get right to it!
Jackson Hole Selloff Continues
Futures are sliding as concerns about tighter monetary policy continue to weigh on the market after Fed Chair Jerome Powell’s Jackson Hole speech last week.
Powell struck down market expectations the bank will pivot to a smaller rate hike at its next meeting.
The major indexes all turned negative for August with Friday’s drop.
CME Group’s FedWatch Tool shows 66.5% of traders expecting the Fed to enact another 0.75% rate hike at the September meeting.
Powell said the central bank will lift interest rates as much as needed to tackle high inflation, even if it causes an economic slowdown.
He said getting inflation under control will take “some time” and will require bringing “some pain to households and businesses”.
Powell said those are the “unfortunate costs of reducing inflation”.
Yields Pop on Fed Expectations
Treasury yields are pushing higher following Powell’s speech on Friday.
The 2-year Treasury yield is up 5 basis points to 3.45% while the 10-year yield is up 7 basis points to 3.10%.
That yield curve remains inverted as the market dumps bonds in anticipation of a recession.
Bitcoin Drops Below $20,000
Bitcoin dropped back below $20,000 over the weekend after Powell’s hawkish comments at Jackson Hole.
The coin is trading around $19,900 this morning while Ethereum is just under $1,500.
That’s the lowest level for Bitcoin since mid-July.
The sharp decline comes as traders dump risk assets across the board.
The drop is also dragging down shares of Coinbase (COIN) which are 2.2% lower ahead of the open.
Oil Prices Rise on Prospect of OPEC+ Supply Cut
Oil prices are rising today as the possibility of an OPEC+ supply cut continues to loom over the market.
West Texas Intermediate crude futures are up 1.3% to over $94 bbl while Brent crude futures are up 0.9% to just under $102 bbl.
Saudia Arabia’s energy minister raised the idea of reducing production last week in order to support prices.
OPEC+ is set to meet on September 5 to vote on supply levels for October.
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