Stocks Closed Higher Ahead Of Jerome Powell's Jackson Hole Speech This Morning  Image: Bigstock Stocks closed sharply higher with all of the indexes in the green. Although, with one more day to go, it's a mixed bag for the week so far. The Dow and the S&P still have some work to do to get positive for the week. But they are within striking distance. The Nasdaq is almost there. The Russell, however, is already up for the week. But it won't take much to get them all across that threshold. All eyes and ears will be on this morning's speech from Fed Chair, Jerome Powell, at the Jackson Hole Symposium. With the next Fed meeting not until September 20-21, traders will be listening to every word Mr. Powell has to say to glean any insight as to how high the Fed will raise rates come September. In addition, they'll be looking for any hints on what comes afterwards, as we have two more meetings after that on November 1-2 and December 13-14. They raised rates by 75 basis points their last two times out. And even though the Fed has been consistent in their messaging that they will continue to raise rates until inflation goes meaningfully lower (i.e., on its way back down to 2%), traders have become skeptical of their resolve. Although, with the 10-year Treasury yield back above 3% (it was at 3.026 yesterday), it looks like many of the skeptics have turned back into believers. (The Fed had previously floated that they expect to see the Fed Funds rate between 3-3.5% (the midpoint is at 2.38% currently), by year's end. That would mean at least another 112 basis points over the next 3 FOMC meetings to hit the high end of that range.) Mr. Powell is expected to speak at 10:00 AM ET. In other news, yesterday's second estimate for Q2 GDP came in better than expected at -0.6% vs. the first estimate of -0.9%. Personal Consumption Expenditures were bumped up from a 1.0% annual rate to 1.5%. We'll get the third and final estimate next month. But Q2 is already old news. The focus is on Q3. And according the Federal Reserve Bank of Atlanta's GDP Now forecast, they see Q3 at 1.4%. Yesterday's Weekly Jobless Claims were also better than expected, falling by -2,000 to 243K vs. estimates for 255K. And Corporate Profits came in with an 11.9% y/y after-tax gain. That was lighter than last month's pace of 15.2%. But is still a healthy clip. With inventory and consumption adjustments, it was up 7.4%. Today we'll get another look at the economy with the International Trade in Goods report, Personal Income and Outlays, Retail and Wholesale Inventories, and Consumer Sentiment. But Mr. Powell's speech will likely be the main event. Should be a busy day. Best,  Kevin Matras
Executive Vice President, Zacks Investment Research | 
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