Deep Sell-Off & Chaos Across Assets Ahead of Jackson Hole

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CAPITAL FLOWS IN GLOBAL MARKETS

Traders suffering from the market's worst run since February face critical events in the coming days, and Federal Reserve Chair Jerome Powell's speech at Jackson Hole may not be the toughest test.

Over the long term, the Fed's approach is crucial, with three policy-setting meetings in 2023. Trading in the interest-rate market favours a halt next month and less than half of a quarter-point boost in November.

Before Powell's Friday speech at a Fed symposium in Wyoming, markets will focus on Nvidia Corp's earnings announcement Wednesday. The chipmaker, now the fourth-largest S&P 500 Index component, blew past its May sales target, sparking the artificial intelligence surge that's lifted the benchmark 14% this year.

Powell concludes the week. Since 2000, a Fed chair's conference address has boosted equities by 0.4% the following week. But traders remember last year's appearance: stocks fell 3.2% the week after Powell warned of keeping policy tight to fight inflation. He risks leaning towards extra tightening this year, which might lower GDP forecasts at a time when China fears are growing.

It would also threaten Wall Street earnings projections, particularly for tech stocks.