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In One Chart: How stocks perform as central bankers gather each year at Jackson Hole

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U.S. stocks tend to see only modest gains when the world’s top central bankers, academics and economists gather each August at Jackson Hole, Wyoming to talk shop, while the bigger upswing tends to happen months later, according to Bespoke Investment Group.

A look at roughly four decades of the summit shows the S&P 500 index
SPX,
+0.80%

experienced only a 0.1% median gain (see chart) once the summit kicked off in late August. The bigger action tends to come later, a fourth-quarter upswing.

Stocks tend to gain in the months after Jackson Hole

Bespoke Investment Group

Bespoke analysts called the Jackson Hold gathering “unremarkable as an equity market catalyst,” at least in the past.

The S&P 500 index was up 0.8% on Thursday as this year’s summit kicked off, with investors waiting to hear from Fed Chairman Jerome Powell on Friday. The Dow Jones Industrial Average
DJIA,
+0.41%

was up 0.4% and the Nasdaq Composite Index
COMP,
+1.03%

was 1.1% higher, after hitting a lull following a powerful summer rally.

A potential reason for past lackluster equity gains during the summit might be related to seasonal trends, with the Federal Reserve Bank of Kansas City typically hosting the annual meeting during the dog days of summer, when much of Wall Street and Main Street takes time off for a last hurrah before autumn starts.

This year, however, could be unlike others, after a brutal first half to 2020 across financial markets. Many of the world’s biggest central banks this year have been ratcheting back easy-money policies, but while trying not to derail their economies. The fight against high inflation has been complicated by surging energy prices due to Russia’s war in Ukraine.

See: Six months after Russia invaded Ukraine, Moral Rating Agency’s ‘Courage Index’ analyzes companies’ statements on Kremlin’s aggression

Federal Reserve officials have reiterated their commitment to fighting the high U.S. costs of living which recently rose to a four-decade high. High inflation already was on the radar when the Kansas City Fed hosted its very first symposium on “World Agricultural Trade: The Potential for Growth,” in 1978 in Kansas City, Mo., before the event moved to Jackson Hole.

How did other assets perform over four decades of Jackson Hole? Here is the Bespoke tally, using the median since 1979:

The US dollar
DXY,
-0.20%

declined less than 0.1%

Commodities
CL00,
-1.89%

GC00,
+0.47%

rose 0.6%

10-year Treasury yield
TMUBMUSD10Y,
3.030%

fell about 0.9%, in basis points

2-year Treasury yield
TMUBMUSD02Y,
3.399%

rose about 2%, in basis points

Related: Stocks may be headed for another selloff according to RBC’s ‘hedge fund hot dogs’ basket

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