Thursday markets were mixed and the Dow briefly turned positive for 2020, before slipping back down before the markets closed. The Dow ended up being up 0.6%, while the S&P 500 inched 0.2% higher, and the Nasdaq fell 0.3%. The Stoxx Europe 600 Index fell 0.6% to 370.72, this was the biggest fall in a week.
The big news came from Fed Chairman, Jerome Powell, when he said the central bank formally agreed to a policy of “average inflation targeting.” This essentially means that the central bank will let inflation run “moderately” above its 2% goal for “some time.” This is to put the explanation into his own words.
You can view the full speech coverage here: Full Video: Federal Reserve Chairman Jerome Powell Annual Speech At The Jackson Hole Economic Policy Symposium
In response to the Fed news, banks saw broad growth. Citigroup was up 1.7%, while JPMorgan Chase, Bank of America and Wells Fargo were all up at least 1.9%.
The 10-year treasury yield rate climbed to 0.74% and the 30-year bond yield improved 1.501%.
On the other side of the markets, tech shares all experienced slides. Facebook and Netflix dropped 3.5% and 3.9%, respectively. Alphabet, Amazon, and Apple were all down more than 0.9%. Microsoft managed to be an outlier and saw its shares grow by nearly 2.5%.
Abbott Laboratories saw a pleasant 8% gain after learning that it had been cleared for a quick-result, 15-minute Covid-19 test. The Trump administration is expected to purchase 150 million of the rapid Covid-19 tests as part of a $750 million agreement with Abbott Laboratories, a White House official confirmed.
The economy contracted slightly less than forecast in the second quarter. Second-quarter GDP was revised to show a 31.7% decrease, rather than the 32.5% drop previously estimated. The initial July 30 reading showed a 32.9% drop in economic activity. Despite the latest reading being slightly better, it still marks the largest quarterly plunge on record.
The Labor Department said Wednesday the number of Americans who filed for unemployment benefits for the first time totaled 1 million last week, which is said to be in line with expectations. This is the second consecutive week that weekly jobless claims surpassed 1 million.