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The stock market was mixed. The S&P 500 Index (SPY) and the Nasdaq Index (QQQ), which are dominated by technology stocks, continued their gains last week, setting new intraday highs. On the other hand, the Dow Jones Index (DIA) fell slightly due to weakness in financial and energy stocks, while Russell 2000 (IWM), which tracks the performance of small-cap stocks, broke the streak and closed down 0.41%. Market participants continued to digest the Fed’s annual Jackson Hole seminar and Chairman Jerome Powell’s important speech on Friday. Looking ahead, market participants have been waiting for new economic data during a busy week, and the August employment report will be released on Thursday.

Although other Fed members issued tough statements at the July meeting, Powell was still highly accommodative in his speech, indicating that he is more inclined to wait for further economic progress before reducing quantitative easing, especially considering the surge in infections caused by delta. body. Powell said: "At the most recent FOMC meeting in July, I, like most attendees, believed that if the economic development is as extensive as expected, it may be appropriate to start to reduce the pace of asset purchases this year. Mid-month is a strong July. The form of employment report has brought more progress, but it has also brought about the further spread of Delta variables. We will carefully evaluate the upcoming data and the risk of changes. Even after the end of our asset purchase, we also hold Long-term securities will continue to increase."

As the market economy is still recovering, Powell once again called for caution, saying that the impact of untimely policy changes will "appear after demand has passed" and "may be particularly harmful." This is a complete quotation, "The main effect of monetary policy on inflation may appear after a lag of one year or more. If the central bank adopts a tightening policy for temporary factors, then the main policy effect is likely to have passed after the demand. Untimely The policy initiatives of the United States have unnecessarily slowed hiring and other economic activities and kept inflation below expectations. Today, with the labor market still largely idle and the pandemic continues, such mistakes can be particularly harmful. We know that long-term unemployment can mean Lasting damage to workers and economic productivity."

Regarding inflation, Powell reiterated the need to proceed with caution, but said that if the incoming data is deemed appropriate, he is ready to take action. He said: “Central banks have been facing the problem of distinguishing temporary inflation spikes from more troublesome developments. Sometimes it is difficult to do this with confidence in real time. At such times, pay close attention to incoming data and The risk of change is irreplaceable. If persistent high inflation becomes a serious problem, the Federal Open Market Committee (FOMC) will definitely respond and use our tools to ensure that inflation runs at a level consistent with our goals. Coming soon. The incoming data should provide more evidence that some supply and demand imbalances are improving, and provide more evidence that inflation continues to slow, especially the prices of goods and services that are most affected by the pandemic. We also expect to continue to create strong jobs. We Will learn more about the impact of the Delta variant."

Regarding Powell's speech, Julian Emanuel, BTIG's chief equity and derivatives strategist, stated that "Powell" did three very, very right things, and it is clear that the market is celebrating this. The first is to keep the presentation concise. The second thing he did was that he sent other Fed governors in the first four weeks to basically tell us all that a rate cut is coming. He just needs to reiterate, and reiterate this message softly, he did it very effectively. The third thing is that he really solves the inflation problem in order to continue. He knows that this is the top priority of the market in the past few months. Although he did not provide any new real evidence to explain why he believes inflation is temporary, he did quote the view that commodity prices continue to slow down, and past history suggests that inflation may be temporary. "

Looking ahead, market participants will receive more data on the strength of the labor market recovery this week, and the Labor Department will release the August employment report on Friday. Economists generally believe that jobs will rebound by 750,000 this month, increasing for the eighth consecutive month, but slightly lower than the 943,000 in July.