Stocks finished the week higher after a wild several days of trading that saw stocks collapse in the first few minutes of trading on Monday, fall sharply in just an hour on Tuesday, and have one of their best days in years on Wednesday.
The price of oil also had a wild ride, collapsing to a new post-crisis low early in the week before climbing almost 20% in just two days to almost the same level where we started the month of August.
First the scoreboard:
- Dow: 16,641, -13, (-0.1%)
- S&P 500: 1,988, +1, (+0.05%)
- Nasdaq: 4,828, +15, (+0.3%)
And now, the top stories on Friday:
- It’s all about the Fed. This weekend, economic leaders are meeting in Jackson Hole, Wyoming for the Kansas City Fed’s annual economic symposium, and Federal Reserve vice chair Stanley Fischer is the main attraction. Speaking to CNBC on Friday, Fischer left the door open for a September rate hike, saying that it is still too early to tell if the recent turmoil in financial markets will delay any plans the Fed many have had going into its September meeting. Fischer, ultimately, gave the Fed about as much flexibility as it could have at this point, and stressed that incoming economic data — notably the US jobs report set for release a week from today — will be key. Fisher will speak on a panel with Mark Carney of the Bank of England and Vítor Constâncio of the European Central Bank on Saturday.
- The market chaos this week did spook investors despite prices ending up back where they started, as data from Bank of America Merrill Lynch showed that on Tuesday, investors dumped stocks at a pace not seen since 2007. For the week as a whole, investors haven’t unloaded this much stock since at least 2002.
- Data from Deutsche Bank’s Torsten Sløk showed that when you look at the world stock market cap as a per cent of GDP, this week’s chaos is barely a blip. And so despite the S&P 500 and Dow both crashing into correction territory this week, on a broader scale it’s almost like it didn’t happen.
- On the economic data front, data on consumer confidence from the University of Michigan showed that consumers more or less shook off the stock market chaos. Confidence did slip a bit in August, to a reading of 91.9 from a reading of 92.9 earlier this month, but as the survey’s Richard Curtin noted, consumers appear to have shaken off this bout of market turmoil much like they did the “Black Monday” crash of 1987, which was far more severe than anything seen this week.
- Also on the economic data front, personal spending and income in July was about in-line with expectations, as income rose 0.4% and spending rose 0.3% compared to the prior month. This report did, however, contain a reading on personal consumption expenditures, an alternate measure of inflation, which showed that on a “core” basis — which is preferred by policymakers — prices rose 1.2% in July, less than was expected by economists.
- Crude oil prices had a wild day again on Friday, rising as much as 7% after a 10% rally on Thursday. In an email on Friday morning, Dave Lutz at JonesTrading said that the pop in oil prices really comes down to one thing: everyone was betting against oil and people had to quickly get out of their positions.
- Also in oil news, the latest rig count from US oil driller Baker Hughes showed that the number of oil rigs in use rose by 1 this week to 675, the sixth-straight week that the number of rigs in use increased. And so while oil prices remain volatile, the rig count — which collapsed at the end of last year — has stabilised through the summer.