Powell hits Jackson Hole

Good morning, team. Phil Rosen here. Often I begin with some quip or pun about markets, but that'll have to wait — it's Fed day.

Below, I'm breaking down everything you want to know ahead of Jerome Powell's speech at 10:00 a.m. ET.

By the time you get to the bottom, you may just be able to convince your friends you're actually in attendance at the famed economic conference — and you'll learn it all faster than you can say Jackson Hole.

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1. All eyes are on Wyoming today, and markets will be hanging on every word Fed Chair Jerome Powell says at the annual gathering of central banks.

Specifically, reactions will hinge on whether he'll hint at a dovish pivot at next month's policy meeting or send investors running for cover by reaffirming the current hawkish stance.  

Unfortunately for those hoping to see doves fly, the consensus going into the meeting is that the Fed's work on tackling inflation is not yet done. 

"My guess is he won't be Paul Volcker, but a Paul Volcker-lite," Rhys Williams, chief strategist at Spouting Rock, told me Thursday, suggesting that Powell's unlikely to pivot to a less aggressive policy.

Both equity and debt markets are expecting a renewed commitment to the hawkish path the Fed has been on all summer, he explained.

"The bond market is believing there's going to be either a 50 or 75 [basis point hike] in September, and at least another 50 in November," Williams said. 

The stock market, meanwhile, seems to be pricing in a 25-basis-point hike in November, he noted. 

"If bonds are correct, in the very short term Powell may be more hawkish than stocks want to hear." 

I also called up Fiona Cincota, senior market analyst at City Index, who emphasized that the Fed governors this week have raised concerns about whether inflation has really peaked. 

And that means stocks could slip in the short-term if Powell commits to inflation-busting talk, she added. 

Before Monday, indexes had climbed in anticipation of a potential dovish pivot, Cincota said, but Fed governors' comments have dashed those expectations this week — and stocks have mostly fallen. 

"I'd put [the odds of] a dovish pivot at 25%, I don't think it's likely," she told me. "With inflation still at 8%, the Fed isn't in a position to say that because it would bring their authority into question."

What will you be focused on today for Powell's speech? Let us know in the comments.

2. Goldman Sachs recommended this batch of stocks most popular with money managers of wealthy clients. These names have beat the market consistently for the past 20 years — see the list of 20 companies here.

3. A real estate investor who purchased 53 properties this year said the market is still going strong. Prices on some distressed properties are still the same and competition from other consumers has declined, he explained. He shared his insights into the shifting trends and why buyers should keep investing. 

4. There's a 70% chance that stocks will fall back to their June lows, veteran chartmaster and strategist David Keller said. Keller explained his current market outlook and why indexes may retest lows — but also broke down why shares may rally toward all-time highs by the end of the year.

5. Alibaba, JD.com, and other US-listed Chinese stocks climbed Thursday following a report that the US is near a deal for audits of Chinese firms. The Wall Street Journal reported that officials from both countries have made substantial progress on a deal. Get the details here.

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This newsletter was curated by Phil Rosen.