Week Ahead: US30 faces Jackson Hole & retail earnings showdown

• US30 ↑ 6% year-to-date, futures pointing to fresh ATH
• Home Depot + Walmart = 7.3% of US30 weight
• Jackson Hole Symposium + US data could trigger more volatility
• Technical levels: 45,500, 45,000 & 44,000

A cocktail of high-risk events may serve up fresh trading opportunities in the week ahead.

All eyes will be on the annual Jackson Hole Economic Symposium, key data and earnings from the largest retail companies in the United States:

Monday, 18th August 

• CAD: Canada housing starts
• JP225: Japan tertiary industry index
• SG20: Singapore trade

Tuesday, 19th August 

• AUD: Australia consumer confidence
• CAD: Canada CPI
• US30: Home Depot earnings

Wednesday, 20th August 

• CN50: China loan prime rates
• EUR: Eurozone CPI
• JP225: Japan trade, machinery orders
• NZD: New Zealand rate decision
• GBP: UK CPI
• USDInd:  US FOMC meeting minutes, Fed President Raphael Bostic speech

Thursday, 21st August 

• EU50: Eurozone HCOB manufacturing PMI, consumer confidence
• GER40: Germany HCOB manufacturing PMI
• JPY: Japan S&P Global manufacturing PMI
• UK100: UK S&P Global manufacturing PMI
• US30: US initial jobless claims, Conference Board leading index, existing home sales, S&P Global manufacturing PMI, Walmart earnings.

Friday, 22nd August 

• CAD: Canada retail sales
• GER40: Germany GDP
• JPY: Japan CPI
• GBP: UK retail sales
• US30: Fed Chair Powell speech at Jackson Hole

FXTM’s US30 is up almost 6% year-to-date, with futures pointing to a fresh all-time high when US markets open this afternoon.

Note: FXTM’s US30 tracks the benchmark Dow Jones Industrial Average index.

US equities appear to be recovering from the inflation-induced selloff after US PPI data accelerated in July by the most in three years. Still, traders are pricing in a 93% probability of a Fed cut by September.

Here are 3 factors that may rock the US30:

1) Jackson Hole Economic Symposium

This is an annual event organized by the Kansas City Fed in Jackson Hole, Wyoming, and will be held from August 21st – August 23rd.

Anything discussed during the symposium could trigger market volatility, especially if it has to do with monetary policy. The spotlight shines on Jerome Powell on Friday amid repeated calls from President Donald Trump to cut interest rates. 

• Should Powell strike a dovish note and signal that the Fed will cut rates in September, the US30 could push higher.
• If Powell expresses concern over inflation risks and sounds more hawkish, this may weigh on the US30 as traders cut back Fed cut bets.

2) Home Depot & Walmart earnings

Earnings from two behemoths in the US retail industry could provide key insight into the strength of consumer spending in the face of Trump’s tariffs.

• Home Depot releases its earnings before US markets open on Tuesday, 19th August, and accounts for 5.5% of the US30 index.

   

• Walmart reveals its Q2 earnings before US markets open on Thursday, 21st August, and accounts for 1.4% of the US30 index.

Ultimately, a positive set of earnings from these retail giants may boost confidence in the US economy – supporting the US30 as risk sentiment jumps. If earnings disappoint, the US30 may dip, but losses could be cushioned by Fed cut bets.

Note: Beyond earnings, watch out for the FOMC meeting minutes on Wednesday, PMIs on Thursday, all of which could influence the US30 index. 

3) Technical forces

The US30 has experienced a bullish breakout above resistance at 45,000. 

Prices are trading above the 50, 100, and 200-day SMA. However, the Relative Strength Index (RSI) is venturing close to overbought territory.

• Should 45,000 prove reliable support regions, prices may venture toward fresh all-time highs at 45,500 and 46,000.
• A move back below 45,000 may trigger a selloff back toward 44,400 and 44,000.