After last week’s taper-induced volatility, the major averages moved higher this week with relative smoothness. Last Friday, Fed Chair Jerome Powell made comments about the timeline of the taper and reassured investors that the Fed would continue to support the economy until its dual mandates were at comfortable levels. This set up the stage for gains throughout the trading week; albeit, there were a few periods of high volatility.
Helping drive that was moderately bullish economic data. Key measures of labor, manufacturing, housing and consumer health all clocked in at strong levels. However, the data wasn’t too strong, indicating that the Fed could still keep rates low. Also, data on the week showed that new COVID-19 figures were hurting the economy once again.
While the earnings season has slowed down, those who did report this week painted a strong picture with decent guidance figures. Individual corporate actions were also bullish on the week with a few deals and M&A announcements.
All in all, the week ended August with gains, preparing, perhaps, for a positive new market month.
Be sure to check out our previous Wrap here, when all eyes were on Jackson Hole.
