Investing.com - Here are the top five things you need to know in financial markets on Friday, August 23:
1. Powell to dominate market attention at Jackson Hole
Federal Reserve Chairman Jerome Powell is scheduled to deliver a speech at 10:00 AM ET (14:00 GMT) Friday at the Jackson Hole Economic Policy Symposium.
Markets will be looking for clarity on the outlook for monetary policy after the minutes from the July meeting showed opinion among Fed officials was sharply divided.
While the U.S. central bank cut rates in July for the first time in a decade, Powell referred to the move as a “mid-cycle adjustment” and two other policymakers voted against the decision, preferring to make no changes.
Markets are expecting the Fed to cut by another 25 basis points at the next meeting in September but will pay close attention to Powell’s remarks for any signs of further measures.
Bank of England Governor Mark Carney will also present a speech at 3:00 PM ET (19:00 GMT) at the event. Expectations have risen that the global slowdown and rising Brexit risks will force the BoE into cutting interest rates before long.
2. Global stocks trade higher ahead of Fed chief speech
Global stocks were on the rise, set to break a three-week losing streak, in the absence of fresh shocks regarding trade policy.
In bond markets, the yield on the U.S. 10-year Treasury was staying above that of the 2-year note, despite a fresh flattening of the yield curve caused by a sell-off in the 2-year, as trades pared back their expectations regarding Powell's messaging later today.
European bond yields have also recovered from record lows posted earlier in the week, after U.K. Prime Minister Boris Johnson's visits to Paris and Berlin spurred hopes that a 'No-Deal' Brexit can be avoided.
3. Salesforce.com soars 6% on upbeat guidance, Foot Locker on deck
Shares of Salesforce.com (NYSE:CRM) jumped more than 6% in premarket trade after the company’s third-quarter and full-year revenue guidance topped expectations.
Salesforce has spent billions on acquisitions in recent years in a move to pump its cloud-based services and said that its purchase of Tableau, its largest acquisition, should add $550 to $600 million to its value this year.
Foot Locker Inc (NYSE:FL) will be in the earnings spotlight as it presents quarterly numbers ahead of the open. Investors are watching to see if a strong U.S. consumer can help the company recover from an earnings miss in the prior quarter.
Read more: Q2 Earnings Season Wrap: Tech, Industrials Take Hit On Growth Worries- Haris Anwar
4. M&A ramps up with acquisitions by Hasbro and VMware
Hasbro (NASDAQ:HAS) saw shares drop nearly 6% after the company announced it would buy Entertainment One (LON:ETO), the owner of Peppa Pig, for roughly $4 billion dollars. Shares in Entertainment One jumped more than 30%, topping the actual offer which led to speculation that some traders see a chance for a rival bid to be made.
Shares in VMware (NYSE:VMW) sank 5% as it announced the acquisition of two providers of cloud security and cloud developer services - Carbon Black (NASDAQ:CBLK) and Pivotal (NYSE:PVTL) - in separate deals valued at about $5 billion. Dell Technologies (NYSE:DELL) was the controlling stakeholder in both companies.
5. Trade and tech in spotlight at G7
The Group of Seven (G7) - comprised of the U.S., Japan, UK, France, Germany, Italy and Canada - is set to kick off this weekend amid little hopes for agreement as leaders battle it out over trade, Iran and climate change.
French President Emmanuel Macron hosts the event and already said there will be no traditional final communiqué as unanimous agreement is unlikely.
The Sino-U.S. trade war has spurred fears of a global economic slump; European powers are struggling to defuse tensions between Washington and Tehran; and U.S. President Donald Trump has shown little enthusiasm for France's push for a universal tax on digital multinationals such as Google (NASDAQ:GOOGL) and Amazon (NASDAQ:AMZN), and disagreed with any efforts to limit carbon emissions in an attempt to slow climate change.
Trump will attend the summit from Saturday to Monday and reportedly plans to hold individual meetings with the leaders of Britain, France, Germany, Japan, India and Canada.
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