Business News

Markets update: Chairman Powell stays the course at Jackson Hole

By Business & Finance
28 August 2023
A single US dollar bill is held in the foreground, The image invites viewers to reflect on the Stocks Performance

Friday closed out a mixed week for equities as investors digested comments from this year’s Jackson Hole Symposium, writes Ian Slattery.

Ian Slattery Zurich investments

Pictured: Ian Slattery, Zurich Investments

As markets now begin to show increased activity after the historically slow month of August, the Federal Reserve’s annual Jackson Hole symposium often portends the current thinking of major monetary policymakers.

This year’s speech from Fed Chair Jerome Powell outlined that inflation must be brought down to its target of 2% and that the Fed are prepared to continue to raise rates if needs be. However, Powell’s speech was more moderate than previous iterations, most notably in 2022 which saw hopes for a halt to hikes quashed, causing a broad sell-off in markets.

Preceding the conference, US stocks rose, and bond yields fell as investors viewed slowing economic data as evidence for central banks having to halt rate increases. One such data point was the release of the US manufacturing and services Purchasing Managers Indexes (PMIs), which measures the rate of business activity in the US.

The Manufacturing PMI for August declined to 47.0, down from 49.0 in July, whilst Services declined to 51.0, down from 52.2. Figures below 50 indicate a contraction in their sector of the economy.

Despite the decline in economic growth, investors took the news positively as in recent weeks’ strong economic data has aided the case for higher interest rates which in turn negatively affected risk assets.

In Europe, investors were encouraged by similar PMIs for Manufacturing and Services. Both the European Manufacturing and European Services PMIs were in contractionary territory in August, leading to optimism in terms of a potential monetary policy shift.

Disappointing signs from China however highlighted that whilst lower leading indicators may lead to more dovish monetary policy it does still represent a slowing economy. Signs of deflation and high youth unemployment in the country last week saw investors pessimistic about any resurgence in the Chinese economy. Chinese officials continue to grapple with these issues as they try to stimulate long awaited growth following a prolonged period of COVID lockdowns.


Global stocks were up last week by 1.2% in euro terms and 0.1% in local terms. Year-to-date global markets are up 12.2% in euro terms and 13.2% in local terms. The US market, the largest in the world, finished at 1.2% in euro terms and 0.1% in local terms.

Fixed Income & FX

The US 10-year yield finished at 4.22% last week. The German equivalent finished at 2.57%. The Irish 10-year bond yield finished at 2.96% The Euro/US Dollar exchange rate finished at 1.08, whilst Euro/GBP finished at 0.86.

Oil finished the week at $80 per barrel and is down -1.1% year-to date in euro terms. Gold finished the week at $1,917 per troy ounce and is up 3.9 % year-to date in euro terms. Copper finished the week at $8,319 per tonne.

The week ahead

Wednesday 30th August

Chinese Manufacturing and Services PMIs released.

Thursday 31st August

Eurozone CPI figures go to print.

Friday 1st September

US Non-Farm Payrolls are issued.

About: Zurich Investments
The team at Zurich Investments is a long established and highly experienced team of investment managers who manage approximately €28.4bn in investments of which pension assets amount to €17.4bn. Find out more about Zurich Life’s funds and investments here.
The team at Zurich Investments is a long established and highly experienced team of investment managers who manage approximately €28.4bn in investment of which pension assets amount to €17.4bn. To find out more about Zurich Life’s funds and investments,
Twitter: @ZurichLife,
Warning: Past performance is not a reliable guide to future performance. Benefits may be affected by changes in currency exchange rates. The value of your investment may go down as well as up. If you invest in these funds you may lose some or all of the money you invest.