Originally published by Rivkin Securities
With nothing ground-breaking coming from the central banker speeches at Jackson Hole, US equity markets drifted mostly sideways with the Dow Jones Industrial Average and S&P 500 both closing up approximately 0.15%. Federal Reserve Chairwoman Janet Yellen spoke at the conference but did not reveal any new insights about when the next interest rate hike might be. Probabilities for a rate hike in December have been drifting lower over the last couple of weeks as the market becomes less certain that there will be another rate hike this year. Current probabilities suggest a 40% chance of a rate hike by the end of the year.
Gasoline prices spiked almost 6% higher as Hurricane Harvey made landfall on the Texas coast and brought severe flooding with it. Unfortunately, because it is a slow-moving storm, it is dropping massive amounts of water on the region. Estimates suggest a further 1.5m of water could still fall in the worst affected areas. Texas is home to a large number of refineries that normally process around five million barrels per day of oil and turn it into gasoline and other oil products. As a result of the flooding, a large amount of refining capacity is offline meaning that gasoline production is severely curtailed. Oil prices have also risen (although not nearly as much as gasoline) as a result of some Gulf of Mexico production being taken offline. The raining is expected to last through to Wednesday so the disruptions could last for some time yet.
On Wednesday, we get the second revision of the US 2nd Quarter GDP which is expected to be revised up by 0.1% to 2.7%. On Thursday Australia releases its private capital expenditure data and on Friday the US releases its employment data. ASX 200 futures are pointing to a slightly higher open this morning.
Data Releases:
- No Significant Data