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Weekly Market Brief: August 28, 2023

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Growth stock rebounded last week, helping the NASDAQ climb 2% even while interest rates rose and the US Dollar strengthened for the sixth straight week.  The Dow Jones Industrial Average didn't participate in the rally, as the value-oriented index fell modestly. Gold gained after four weeks of declines, and crude oil dropped 1.75% to close back below $80 per barrel.

Federal Reserve Chair Jerome Powell delivered a lengthy address at the Jackson Hole Economic Symposium on Friday, potentially capping off the most dramatic cycle of interest rate hikes since the 1980s. While Powell acknowledged that inflation remains too high and the Fed is willing to raise rates further if they deem it appropriate to bring inflation down to their 2% goal, he believes the actions they've taken over the last year will allow them to "proceed carefully as we assess the incoming data and the evolving outlook and risks."

Monitoring Macroeconomics

GDP growth accelerated to a 2.4% annual rate in Q2, up from a 2.0% in Q1. The US consumer has proven more resilient than most economic forecasters believed possible, non-residential investment is accelerating, and last year's downturn in residential construction appears to have turned the corner. A 'soft landing' - the scenario where the Fed successfully contains prices without creating widespread economic hardship - seems more and more likely with each passing month, and calls for recession are fading.

Measures of inflation remain well above the Federal Reserve's 2% goal, but CPI has decelerated steadily since last year's peak and measures of core price changes are at the lowest rate since 2021. Unemployment, meanwhile, is near 70-year lows, and job creation to start 2023 has been well above the level needed to keep pace with population growth. 

What's Ahead

Here are the key data releases to keep an eye on ahead of the long weekend.