S&P 500 Snapshot: Jackson Hole Has Little Impact on the Market

August 21, 2014

by Doug Short

Today's much anticipated first day of the Federal Reserve Symposium in Jackson Hole turned out to be a bit of a yawner for the market. The S&P 500 opened fractionally higher and immediately dropped into the red. It reversed directions and briefly peaked above yesterday's record close as Fed Chair Yellen gave her opening address on Labor Market Dynamics and Monetary Policy. The stock market responded with relatively little volatility. The S&P 500 dropped to its -0.38% intraday low about an hour later. Subsequent rally attempts hit a ceiling around the level of yesterday's close. The index finished the session with a small loss of 0.20%, snapping a four-day rally, record-setting rally.

Treasuries were essentially unchanged after the Fed event. The yield on the 10-year Note closed at 2.40%, down 1 bp from yesterday's adjusted close.

Here is a 15-minute chart of the week.

With bulls and bears eager for clues from the big Fed event, Chair Yellen walked a tightrope in the Jackson Hole opening address. The success of her balancing act was apparent in today's market volume. It was the lightest since the July 3rd, when the NYSE closed at 1 PM.

A Perspective on Drawdowns

The chart below incorporates a percent-off-high calculation to illustrate the drawdowns greater than 5% since the trough in 2009.

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For a longer-term perspective, here is a pair of charts based on daily closes starting with the all-time high prior to the Great Recession.

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