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The Economic Calendar:
MONDAY: NAHB Housing Market Index (9:00a CT)
TUESDAY: Building Permits (7:30a CT), Housing Starts (7:30a CT), Redbook (7:55a CT), Fed Bowman Speech (1:10p CT), API Crude Oil Stock Change (3:30p CT)
WEDNESDAY: MBA Mortgage Applications (6:00a CT), EIA Petroleum Status Report (9:30a CT), Fed Waller Speech (10:00a CT), 20-Year Bond Auction (12:00p CT), FOMC Minutes (1:00p CT), Fed Bostic Speech (2:00p CT)
THURSDAY: Fed Bostic Speech (6:30a CT), Jobless Claims (7:30a CT), Philly Fed Manufacturing Index (7:30a CT), S&P Global Composite PMI Flash (8:45a CT), CB Leading Index (9:00a CT), Existing Home Sales (9:00a CT), EIA Natural Gas Report (9:30a CT), Fed Balance Sheet (3:30p CT)
FRIDAY: Fed Chair Powell Speech (9:00a CT), Baker Hughes Rig Count (12:00p CT)
Key Events:
Federal Reserve Chair Jerome Powell is confirmed to speak at the Jackson Hole Symposium on August 22nd, an event historically used by Fed officials to signal policy shifts.
Following recent weak jobs data, markets have begun pricing in a September rate cut, with several Fed speakers like Daly, Kashkari, and Bostic alluding to such an outcome.
While some officials remain more reluctant, Fed speakers at Jackson Hole are expected to elaborate on their views on policy and the economic outlook, particularly in light of recent NFP and inflation data. The NFP data specifically bolstered the case for a September rate cut, though a hot PPI report has added a counterargument.
Beyond the immediate policy discussion, there is also speculation about President Trump’s ability to appoint two new Fed governors, which could influence policy once Powell steps down.
Following the Trump-Putin meeting in Alaska on August 15, crude oil futures are expected to open with a muted, bearish reaction when trading resumes on Sunday.
The key outcomes from the summit include an agreement to pursue a direct peace deal for Ukraine, bypassing a ceasefire, and Trump’s decision to hold off on imposing tariffs on countries like China and India for purchasing Russian oil.
This reduces the immediate risk of disruptions to Russian oil exports, which have been redirected to Asia following Western sanctions.
Analysts, including Ajay Parmar from ICIS, suggest this uninterrupted flow of Russian oil will likely lead to a slight dip in prices in the near term, though the impact is expected to be minimal.
Brent crude settled at $65.85 per barrel and West Texas Intermediate at $62.80 on Friday, both down nearly $1 before the talks.
Markets are now focused on Trump’s upcoming meeting with Ukrainian President Volodymyr Zelenskiy and European leaders in Washington on Monday, which could further influence price movements. Until clearer outcomes emerge, crude prices are likely to remain range-bound.
Source: TradingView
Calling tops is hard – better to go with the break lower, if and when it comes.
The current bull run has propelled the S&P 500 to a valuation level rarely seen in recent history, raising questions about the sustainability of the rally.
The index is trading at a punchy 22.5 times its earnings, a level in the 95th percentile since 1988, according to Bank of America strategist Michael Hartnett. Analysts note that these market gains have been primarily driven by multiple expansion, rather than a significant improvement in consensus earnings forecasts.
This high-flying market faces a complex headwind from ongoing tariffs. The full inflationary impact of these measures is yet to be felt, as companies are still working through excess inventories. Once these stockpiles are depleted, analysts anticipate consumers will experience “sticker shock” from higher retail prices.
The biggest challenge to the administration’s trade policy, however, is the U.S. industrial base itself. Analysts suggest that the country lacks the necessary labor and production capacity to quickly scale up domestic manufacturing, meaning tariffs are more likely to result in a combination of higher consumer prices and compressed profit margins for businesses than in a meaningful return of domestic production.
Against this backdrop, some prominent investors are finding value in the healthcare sector. The notes highlight that both Warren Buffett and Michael Burry have taken stakes in UnitedHealth Group (UNH), signaling that even as broader market valuations climb, certain defensive sectors remain attractive to influential investors.
Source: BofA
Watch Fed messaging — critical for next moves in bonds.
Federal Reserve officials are signaling a cautious approach to future rate cuts, with St. Louis Fed’s Musalem and San Francisco Fed’s Daly both pushing back against the idea of a large, 50 basis point cut. However, a September cut is widely anticipated.
Despite recent labor market weakness being previously forecasted, the immediate focus is on whether the Fed will reduce the federal funds rate by 25 basis points in September.
Analysts expect the Fed’s economic projections to remain consistent with June’s outlook, showing one additional cut for the remainder of 2025. This would be framed as a cautious reduction in policy restrictiveness in response to emerging labor market risks.
In the bond market, some analysts have shifted from advocating curve steepeners to favoring outright long positions on the 5-year Treasury, with a baseline view that the fed funds rate will average below 3% over the next five years.
All eyes are now on Fed Chair Powell’s speech at Jackson Hole on Friday, where a dovish tilt would be contingent on weak jobs data and sustained inflation signals.
Here’s what we expect from the FOMC Minutes on Wednesday:
The FOMC held interest rates steady at 4.25-4.50%, as anticipated at the last meeting.
Governors Waller and Bowman dissented, voting for a 25 basis point rate cut, consistent with their previous comments. Following the soft July jobs report, traders are now fully discounting two 25-basis-point rate cuts in 2025, with a probability of a third. The Fed’s July statement noted elevated uncertainty and a moderation in economic growth in the first half of the year.
At his press conference, Fed Chair Powell leaned hawkish, pushing back against expectations for a September rate cut, and reiterated that the Fed will remain data-dependent. He noted that tariffs could cause a one-off price rise but emphasized that the Fed would act to prevent “serious inflation”. Powell also mentioned that while inflation remains above target, the labor market is at or near maximum employment. He described the dissents from Waller and Bowman as unsurprising, calling the meeting “one of the Fed’s better meetings.”
Bitcoin futures are rolling from August to September at a notable cost to long positions, with the market expected to charge traders $800 to $1,000 per coin for a third consecutive month of negligible gains. This high cost of carry, or contango, indicates persistent demand in the futures market, but has yet to translate into meaningful “alpha” for holders, trading at a premium similar to prior months despite a recent period of sideways price action.
This dynamic comes at a time when Bitcoin’s market behavior is evolving. While the cryptocurrency is often viewed as a risk-on asset, its surprising resilience during a recent market-wide swoon and “tariff panic” suggests it is being priced more heavily on factors beyond sentiment, such as its role as a hedge against currency debasement. When an asset’s price action deviates significantly from established expectations, it often warrants closer attention from traders.
The market is now closely watching a potentially explosive technical catalyst. If Bitcoin were to reach the $125,000 level, it would push the share price of BlackRock’s IBIT spot ETF into the mid-$70s. This would trigger a massive, forced buy-in from Authorized Participants (APs) to create new shares to meet demand from expiring call options. According to an analysis, such a scenario could require APs to purchase an estimated 11,355 Bitcoins, amounting to a roughly $1.5 billion influx.
The potential for such a significant, non-discretionary buying event has some analysts suggesting it could be a pivotal moment for the cryptocurrency, arguing that the stage is set for a significant upward move.
These performance charts track the daily, weekly, monthly, and yearly changes of various asset classes, including some of the most popular and liquid markets available to traders.
