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The speech by Fed chief Jerome Powell in Jackson Hole caused a return of huge volatility on Friday. Other Federal Reserve members also spoke in a hawkish voice: Bostic, Harker and Bullard;
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Indices reacted with declines in the face of Powell's strong and brief statement, which signaled that the central bank is focused on bringing inflation to its 2% inflation target and is not considering suspending the tightening cycle prematurely. Powell also signaled the probability of another large 75bp hike in September, although bankers are making the hike contingent on a set of data from the U.S. labor market;
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The end of the week saw a dramatic drop in stock market sentiment. Indexes from the Old Continent ended the session lower amid a panic sell-off in the US. The DAX lost 2.26%, London's FTSE lost 0.7%;
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Even weaker sentiment is seen in the US, where the NASDAQ loses more than 2.77%, the S&P500 nearly 2.19% and the Dow Jones 1.89%;
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Alphabet and Amazon shares 'stand out' with sizable declines against US 'Big Tech' companies, losing 4.5% and 3.5% respectively, diving below the index average. Apple is also doing poorly, with a sell-off of nearly 3%. Despite oil below $100 per barrel, the stock price of oil company Occidental Petroleum, in which Buffett's fund intends to acquire more than half of the shares, comes out on a positive note in the second part of the session;
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the dollar strengthened after Powell's speech in Jackson Hole. The EURUSD pair fell again and returned to near parity;
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Brent crude oil remains below $100 per barrel. Gold and silver reacted by falling in the face of a hawkish Fed and the specter of another 75 bps hike. Silver fell below $19 an ounce;
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Consolidating the movement of cryptocurrencies after the last massive sell-off ended with another move south, risky assets are in retreat. Bitcoin is struggling to stay above $20,500 levels, Ethereum is holding support above $1,500
The money market is now pricing a 64.4% chance of a 75 basis point rate hike at the Fed's September meeting. Source: Bloomberg
