Investing.com - Here are the top five things you need to know in financial markets on Friday, August 24:
1. Fed chief Powell set to deliver remarks
Markets will likely focus attention on Federal Reserve chairman Jerome Powell’s remarks at the Jackson Hole Economic Symposium at 10:00 AM ET (14:00 GMT) Friday.
Investors will follow the speech, titled “Monetary Policy in a Changing Economy”, looking for any signs of further hints on the path or rate increases.
The minutes from the latest policy meeting released on Wednesday confirmed that policymakers are ready to keep raising rates at a moderate pace in light of above-trend growth.
“Members expected that further gradual increases in the target range for the federal funds rate would be consistent with sustained expansion of economic activity, strong labor market conditions, and inflation near the Committee's symmetric 2% objective over the medium term,” the minutes said.
In addition to details on policy tightening, market participants will pay close attention to anything from the Fed chief about maintaining the central bank’s independence after U.S. President Donald Trump expressed his disappointment with the U.S. central bank.
Also key for the speech will be any evaluation of how recent trade tensions could disrupt future policy decisions. “Some participants suggested that, in the event of a major escalation in trade disputes, the complex nature of trade issues, including the entire range of their effects on output and inflation, presented a challenge in determining the appropriate monetary policy response,” this week’s release of the minutes said.
2. China prepared to fight U.S. on trade
China’s finance minister Liu Kun told Reuters on Friday that Beijing would not be swayed by U.S. strong arm tactics on trade.
“China doesn’t wish to engage in a trade war, but we will resolutely respond to the unreasonable measures taken by the United States,” he said.
The two-day trade talks between China and the U.S. ended on Thursday with no major breakthroughs.
"We concluded two days of discussions with counterparts from China and exchanged views on how to achieve fairness, balance, and reciprocity in the economic relationship," White House spokeswoman Lindsay Walters said in a brief statement released Thursday.
The talks came even as both parties moved ahead with 25% tariffs on $16 billion worth of each other’s goods this week.
No further talks between the two sides had been scheduled, Bloomberg reported citing a person familiar with the discussions. The person added that it is likely no further negotiation would happen until after November’s mid-term elections in the U.S.
3. Russia contemplates response to U.S. sanctions, Turkey on holiday
Apart from the political tension with China, Russian deputy foreign minister Segei Ryabkov warned on Friday that Moscow may ban more American politicians from entering the country as part of its response to a new round of U.S. sanctions.
The U.S. is expected to impose a new round of sanctions on Russia on August 27 that would curb Russia's access to sensitive U.S. national security-controlled goods.
“We could respond symmetrically, asymmetrically, (or) we could lengthen our own list of 'sanctioned' politicians,” Ryabkov told the Russian magazine International Life in an interview.
Meanwhile, the Turkish crisis remained in the background, with the lira posting slight losses after Turkish President Tayyip Erdogan's spokesman accused the U.S. of waging "economic war" on Thursday.
Trading volumes were thin and probably largely offshore as Turkish markets are closed all week for the Muslim festival of Eid al-Adha. They will reopen on Monday.
4. Global stocks mostly higher ahead of Powell
U.S. stocks pointed to a slightly higher open on Friday as investors looked ahead to Powell’s speech and the release of July durable goods orders. With earnings season mostly concluded, attention will focus on a report due from Foot Locker (NYSE:FL) ahead of the opening bell. At 5:55 AM ET (9:55 GMT), the blue-chip Dow futures rose 49 points, or 0.19%, S&P 500 futures gained 5 points, or 0.18%, while the Nasdaq 100 futures traded up 17 points, or 0.22%.
Elsewhere, European stocks also registered small gains as markets digested the latest round of U.S.-China talks and investors looked ahead to Jackson Hole.
Earlier, Asian stocks ended the session mostly higher with Japan's Nikkei 225 up 0.8% while China's Shanghai Composite gained 0.2%
5. Core Durable Goods Expected to Rise
Before Powell heads to the mic, the Commerce Department will report the latest durable goods numbers at 8:30 AM ET (12:30 GMT).
Orders for goods that last three or more years are expected to have fallen 0.5% in July, compared with a rise of 0.8% the month before, according to a survey of economists.
Core durable goods orders, which exclude transportation, are forecast to have risen 0.5% last month.
Economists expect that orders for non-defense capital goods excluding aircraft, a closely watched proxy for business spending plans, rose 0.4%.
Ahead of the release and while waiting for Powell, the dollar was edging down. The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, decreased 0.24% to 95.32 as of 6:15 AM ET (10:15 GMT).