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By Noreen Burke
Investing.com - Investors will be on the lookout for any hints this week from the Federal Reserve about how much it could do to help the recovery from the coronavirus pandemic. The economic calendar features updates on durable goods and home sales. Political developments will remain on the radar as the Republican convention kicks off on Monday, with Congress still locked in a stalemate about what measures should be included in the next round of fiscal stimulus. It could be another big week for stock markets after the S&P 500 recouped all its coronavirus-driven losses and ended at Friday at record highs. Meanwhile, energy traders will be closely following two tropical storms heading into the Gulf of Mexico. Here’s what you need to know to start your week.
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Fed Chair Jerome Powell takes center stage at (virtual) Jackson Hole
Investors will be looking for indications on how the Fed will try to manage the long-term economic recovery in a speech by Chairman Jay Powell on the opening day of the annual Jackson Hole conference on Thursday.
Since the global financial crisis, Fed chiefs have used their keynote speech at the Jackson Hole conference - being held virtually this year for the first time in nearly four decades because of the pandemic - to signal important shifts in monetary policy or the economic outlook.
A major question - particularly ahead of the Fed's September policy meeting - is whether the central bank will shift its inflation targets to an average, which would allow inflation to run higher before interest rates are raised.
Investors may also be on the lookout for signs that the Fed is looking at additional ways to bolster the economy should Congress fail to deliver a new pandemic relief package.
Economic data to point to choppy recovery
The U.S. is to release data on July durable goods orders on Wednesday which is expected to show growth remained solid last month as the economy reopened.
Market watchers will also be keeping an eye on figures for new and pending home sales on Tuesday and Thursday, respectively. Real estate has been one of the bright spots of the economy during the pandemic with mortgage rates near record lows.
The economic calendar also features updates on personal income and spending, consumer confidence and consumer sentiment, along with Thursday’s weekly look at initial jobless claims. Claims unexpectedly rose back above the 1-million-mark last week’s report showed, a setback for a struggling U.S. job market.
Republican convention begins
Markets will continue to follow developments in Washington as the Republican nominating convention for President Donald Trump gets underway on Monday. The convention is expected to culminate in a live acceptance speech from Trump on Thursday night on the South Lawn of the White House.