Jackson Hole

Global markets are on tenterhooks in an anxious countdown to Federal Reserve Chair Jerome Powell’s speech at an annual central banking symposium in Jackson Hole, Wyoming. Fed officials struck a hawkish chorus as the meeting got underway, signaling interest rates need to keep going up to fight inflation and hinting that investors are erring in expecting a slowdown in the pace of tightening anytime soon. Powell’s tone has the potential to roil markets both ways — if he ups the ante, stocks and bonds look vulnerable, but if he is less tough than traders expect, they could breathe a collective sigh of relief. One thing is for sure: investors will be hanging on his every word.

Russia Troops

President Vladimir Putin ordered his army to boost troops by 137,000 to 1.15 million — the highest level in more than a decade — as Russia digs in for its war against Ukrainian forces. Putin’s brief decree, published on the Kremlin’s website, didn’t explain the motivation for the increase or where the new recruits would come from. Russia has turned to private military contractors, local “volunteers” and recruits from among prison inmates to replenish the losses it has suffered in six months since it invaded. Its advances have stalled in recent weeks and its military is under growing pressure to deliver on the Kremlin’s promised goals.

Energy Records

European energy extended its blistering rally as the worst supply crunch in decades heightens pressure on politicians to do more to rescue industries and households. German and French power soared to fresh records on further nuclear reactor outages, as benchmark natural gas futures jumped as much as 11%. The fuel is near the level last seen in the early weeks of Russia’s invasion of Ukraine, when prices had hit unprecedented intraday highs. European Union member states have already earmarked almost $280 billion to ease the price burden but that is unlikely to be enough.

Twitter Bots

Twitter was ordered to hand over more information about spam and bot accounts to Elon Musk as part of its legal fight to make the billionaire complete his $44 billion acquisition of the social-media platform. Delaware Chancery Court Judge Kathaleen St. J. McCormick Thursday ruled Twitter must turn over information on about 9,000 accounts it surveyed last year in hopes of identifying which had human beings attached to them. Twitter sought to deny Musk access to this “historical snapshot” on privacy and other grounds. The ruling on the bot survey was only among multiple orders McCormick issued Thursday to resolve discovery issues raised by both sides in the case. 

Coming Up…

European shares look headed for gains, following Asian and US stocks higher as market watchers await Powell’s Jackson Hole speech for insight on the central bank’s path. UK energy regulator Ofgem announces its price cap on Friday, providing clarity to millions of households worried about the cost of their power bills this winter. Data include Sweden PPI inflation and Italy consumer confidence. JinkoSolar and Canadian Western Bank report on a light day for earnings.

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(Source: Bloomberg, August 26-2022)