Stocks were mixed as all eyes were on the Kansas City Fed’s annual economic symposium in Jackson Hole, Wyoming. Federal Reserve Chair Janet Yellen was the headline speaker, with comments from European Central Bank president Mario Draghi.
First, the scoreboard:
- Dow: 17,001.22, -38.2, (-0.2%)
- S&P 500: 1,988.40, -4, (-0.2%)
- Nasdaq: 4,538.55, +6.5, (+0.1%)
And now, the top stories on Friday:
1. Janet Yellen spoke in Jackson Hole, and her speech was primarily concerned with the labour market, which she said still hasn’t recovered from the financial crisis. Yellen said that while several indicators suggest a strengthening labour market, she still see “significant” underutilization of labour resources.
2. The general consensus is that Yellen’s comments weren’t hawkish, but not as dovish as they could’ve been. In short, Yellen reiterated that she plans to remain flexible with regard to when and where interest rates will go in the future, but did say that, “if progress in the labour market continues to be more rapid than anticipated by the Committee or if inflation moves up more rapidly than anticipated, resulting in faster convergence toward our dual objectives, then increases in the federal funds rate target could come sooner than the Committee currently expects and could be more rapid thereafter.”
3. Yellen’s comments were also seen by some as “splitting the difference” between two takes on the labour market. This prompted a number of economists to recycle Harry Truman’s famous quip about economists: “Give me a one-handed economist! All my economists say, ‘on one hand … on the other.'” An interesting day for economics, not a great day for economic humour.
4. Mario Draghi, president of the ECB, also spoke at Jackson Hole, and outlined some of the major employment issues that the Eurozone faces. As Draghi said at the top of his speech, “No one in society remains untouched by a situation of high unemployment.” Draghi’s speech also included a number of charts, but one chart that compares the unemployment rate between the U.S. and the Eurozone shows how much of a disaster employment has been in the economic bloc since the sovereign debt crisis.
5. In stock news, power company Dynegy said it would buy more than $US6 billion worth of coal and gas power assets from Duke Energy, and shares of the company gained more than 8% following the news.
6. Keurig Green Mountain shares gained more than 13% after the company announced a partnership with Kraft to start selling its K-Cup coffee pods. This deal will allow coffee under the Maxwell House and McCafe brands to be made in K-Cups that are compatible with Keurig’s at-home coffee brewing systems. Year-to-date, shares of Keurig are now up more than 75%.
7. Video game retailer GameStop gained more than 6% after the company on Thursday night announced revenue in the second quarter grew more than 25% over the prior year. The company said that strong demand for Microsoft’s Xbox One and Sony’s PlayStation 4 helped hardware sales more than double in the second quarter.
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