Will Powell deliver on Friday? | Manufacturing recession? | The 'deep state' CEO

THU, AUG 22, 2019

EVENING BRIEF

AS OF THU, AUG 22, 2019 • 04:04 ET

DJIA		26252.24
		+0.19%	+49.51

S&P 500		2922.95
		-0.05%	-1.48

NASDAQ		7991.39
		-0.36%	-28.82

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DOW
NAME	LAST	CHG	%CHG
AAPL	212.46	-0.18	-0.08%
CSCO	48.18	-0.59	-1.21%
INTC	46.78	-0.37	-0.78%

S&P 500
NAME	LAST	CHG	%CHG
GE	8.19	+0.03	+0.37%
BAC	27.19	+0.26	+0.97%
AMD	31.90	+0.20	+0.63%

NASDAQ
NAME	LAST	CHG	%CHG
AMD	31.90	+0.20	+0.63%
AAPL	212.46	-0.18	-0.08%
CSCO	48.18	-0.59	-1.21%

EDITOR'S NOTE

Federal Reserve officials appearing today on CNBC said nothing to calm turbulent markets.

Stocks swung from positive to negative and back throughout the day, and the much-feared yield curve briefly inverted for a third time.

On Friday, all eyes will be on Federal Reserve Chairman Jerome Powell when he speaks from the central bank's annual conference in Jackson Hole, Wyo.

The market and President Donald Trump are pressuring the Fed to deliver a string of interest rate cuts, or maybe just one big one, but they may not get what they want soon enough for their liking.

Fed officials speaking with CNBC's Steve Liesman in Jackson Hole said they didn't feel the Fed's July rate cut was necessary.

"It wasn't required in my view," said Kansas City Fed President Esther George. "With this very low unemployment rate, with wages rising, with the inflation rate staying close to the Fed's target, I think we're in a good place."

Philadelphia Fed President Patrick Harker was on the same page. "I think we should stay here for a while and see how things play out."

Bonds rallied, sending their yields lower, and stocks sank following their remarks. The yield curve – which compares the rate on the 2-year to the 10-year Treasury note – inverted, meaning the short-term was paying a higher yield than the long-term bond. This move is widely regarded as a recession indicator, and cries out for a Fed rate cut.

Stocks would recover before the end of the day, but traders remain on edge. The stock market is still lower from when the Fed cut rates at the end of July, a move that was supposed to juice equities.

By many measures – unemployment, inflation, and consumer spending – the U.S. economy remains strong. But recession fears have accelerated since the Fed cut. On Thursday, a key manufacturing index showed a contraction for the first time in nearly a decade.

Recessionary signs such as shrinking manufacturing numbers bolster the argument for a rate cut. But it's unclear whether remarks from George and Harker represent individual viewpoints, or whether they're setting the table for a disappointing speech from Powell on Friday.

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