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Stocks - Wall Street Shrugs After Powell's Speech

Stock MarketsAug 23, 2019 02:14PM ET
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Investing.com - U.S. stocks traded lower Friday after Federal Reserve Chairman Jerome Powell reiterated that the central bank will act “as appropriate” to sustain the economy, in a speech that also blamed trade policy for much of the global economic slowdown.

The Dow Jones Industrial Average was down 33 points, or 0.1%, by 10:30 AM ET (14:30 GMT), while the S&P 500 was off 6 points, or 0.2%, and the Nasdaq 100 was down 25 points ,or 0.3%.

Stocks had already opened lower, reeling from China’s announcement of import tariffs on some $75 billion of U.S. imports, including new levies on crude oil and autos.

After a brief bounce, as Powell’s headlines hit the wires, they resumed their declines as the speech failed to flesh out any promises for monetary stimulus beyond what Powell had already said in recent public appearances.

If anything, the speech represented some pushback against pressure from President Donald Trump, who has repeatedly insulted Powell and the Fed over Twitter and called for a 100-basis-point cut in its interest rates.

At three separate points in his speech, Powell referred to the problems for the central bank by trade policy, in what appeared to be an implicit critique of Trump’s approach to the U.S.-China relationship.

“While monetary policy is a powerful tool that works to support consumer spending, business investment, and public confidence, it cannot provide a settled rulebook for international trade,” Powell said, adding that there are “no recent precedents to guide any policy response to the current situation.”

Powell also noted that the U.S. economy is still looking strong, despite increased risks to the global outlook.

“Job creation has slowed from last year's pace but is still above overall labor force growth. Inflation seems to be moving up closer to 2 percent,” he said. “Based on our assessment of the implications of these developments, we will act as appropriate to sustain the expansion, with a strong labor market and inflation near its symmetric 2 percent objective.”

Among the most active stocks Friday, Foot Locker (NYSE:FL) fell 12% after its quarterly update failed to match the strength of other retail reports this week. Salesforce.com (NYSE:CRM) rose 5.7% after its quarterly results showed new acquisitions contributing to a healthy 22% rise in revenues, while Boeing (NYSE:BA) rose 3.1% on the back of reports that the Federal Aviation Agency is getting closer to letting the troubled 737 Max fly again.

Trade-sensitive semiconductor stocks were broadly lower, as was Apple (NASDAQ:AAPL), which lost 0.9%.

Crude oil futures, however, recovered some of the losses they made on the back of the Chinese news to trade at $54.22 a barrel, a loss of 2.0% on the day. Haven assets made broad but unspectacular gains: gold futures gained nearly 1% to $1,523.15 a troy ounce. The dollar index, which tracks the greenback against a basket of currencies, gave up 0.1% on the back of the speech, mainly due to losses against the yen and Swiss franc.

Stocks - Wall Street Shrugs After Powell's Speech
 

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Haz Matt
Haz Matt Aug 23, 2019 3:58PM ET
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time to pull this and rewrite...
NOELLE VEGA
NOELLE VEGA Aug 23, 2019 2:11PM ET
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Another insight-free headline and article.
XEVEN st
XEVEN st Aug 23, 2019 2:08PM ET
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Never start a fight or a war you are not one hundred percent certain that you can win. This trade war between China and America could likely be as devastating to the current world’s financial prosperity as any physical war with bombs and guns. This trade war has exposed how dependent we (America) is on a foreign nation. President Trump started off with good goals to put the American working class and the country in the leading position as it pertains to jobs and wages. There have been mistakes along the way such as agitating an already hypersensitive stock market with aggressive tweets etc.… A great deal will be written about the country’s vanishing sovereignty and generations of a people infatuated with living in debt and well beyond their means.
XEVEN st
XEVEN st Aug 23, 2019 2:08PM ET
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With over twenty-two trillion dollars in debt this paper fiat system has noticeably created unsustainable cultures. It is extremely concerning that with the level of so called intelligence produced by this countries universities and government policies as well as the enormous quantities of capital that there has been no one screaming from the roof tops in alarm.
nick bryson
nick bryson Aug 23, 2019 1:40PM ET
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Shrug? I've made a bet on the market to fail. Today it shot up 5% in under ten minutes. At last glance I'm up 7% for the day since markets opened
Bade Sahib
Bade Sahib Aug 23, 2019 1:31PM ET
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Trump has to stoptweeting
Andrew carson
Andrew carson Aug 23, 2019 12:23PM ET
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Hardly a shrug for equities.
Jon Bal
Jon Bal Aug 23, 2019 11:31AM ET
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if the fed had cut rates by 1% like trump said to i would of got a 2nd and 3rd mortgage, maxed out all my credit cards and bought a few dozen tons of coal that day..too bad he didn't though
Delonte Crosby
Delonte Crosby Aug 23, 2019 10:56AM ET
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45 imposing taxes on China is what slowed down the trading like 3or 4 weeks ago . Some stocks have yet to even bounce back from where they were at before that tweet went out of him taxing China for 300 billion dollars.
 
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