Late August is here.

That means the Jackson Hole symposium will keep the cable news shows focused on macro discussion in the last couple days of the Global Week Ahead.

The Kansas City Fed has announced it will host its 2021 Economic Policy Symposium, “Macroeconomic Policy in an Uneven Economy,” virtually on Friday, Aug. 27th.

The program’s full agenda will be available at the external link www.KansasCityFed.org at 7 p.m. CT/8 p.m. ET on Wednesday Aug. 26th.

Each year since 1978, the Federal Reserve Bank of Kansas City has sponsored a symposium on an important economic issue facing the U.S. and world economies.

The Federal Reserve Bank of Kansas City’s Economic Policy Symposium in Jackson Hole, Wyoming, is one of the longest-standing central banking conferences in the world.

The event brings together economists, financial market participants, academics, U.S. government representatives and news media to discuss long-term policy issues of mutual concern.

The Kansas City Fed selects the symposium topic each year and asks experts to write papers on related subtopics. To date, more than 150 authors have presented papers on topics such as inflation, labor markets and international trade.

Continuing with past practice, conference papers and other materials will be posted as they are presented during the event.

All papers are available online here.

Next are Reuters’ five world market themes, reordered for equity traders—

(1) Fed Taper Hand-Wringing Will Pick Up at Jackson Hole

Fronted by Jerome Powell, the great and good of the central banking world gather at Jackson Hole, Wyoming, from Thursday to Saturday.

The big question for the Federal Reserve Chair: When is taper time?

The Fed is expected to outline taper plans in September, but markets are hoping for signals from Powell at the annual research conference on the trajectory of the $120 billion-a-month asset purchase program.

Easy-money policies have buttressed equities, and any inklings about Fed plans to dial back could cause ructions, with July minutes having just provided a taste of that.

Policymakers looked far from united in their views.

But the prospect of stimulus being reduced when the spread of the Delta coronavirus variant and supply chain issues loom over a recovery that has started to look tired has spooked markets.

(2) The German Election, the Bundestag, Is September 25th

The past few national elections in Germany have been rather unexciting affairs. But a shift indicated in recent opinion polls suggests the one on Sept. 26 could prove different.

The center-left Social Democrats have overtaken the Greens and are closing the gap with Chancellor Angela Merkel's conservative Christian Democrats.

That means for the first time this year, a two-way coalition between her conservatives and the Greens, one anticipated outcome, is forecast to be narrowly short of a majority of seats.

If that turns out to be the case, Europe's biggest economy could be set for months of uncertainty; analysts note the range of possible three-way coalition tie-ups is much wider than in the past. Don't be surprised if markets pay more attention to Germany in coming days.

(3) Have Eurozone PMIs Peaked, Implying Peak GDP Growth?

It's been a good few months for European stocks.

Since March 2020, they've climbed more than 70%, hitting a record high in recent days thanks to accelerating growth and falling interest rates. European PMIs rose to a 20-year high and inflation-adjusted bond yields are at record lows.

But there are headwinds in the form of rising prices, supply chain issues, labor shortages and the Delta variant.

PMIs in the region over the next few days will show just how strong those might be.

(4) Watch China for Weak Macro Data and Policy Responses

In recent weeks data for China's export growth, factory output and retail sales have all missed forecasts as COVID-19 outbreaks dampened demand at home and abroad.

Industrial profits due Friday may find some relief in the recent retreat of commodity prices. But it's clear the world's second-biggest economy now faces challenges and not all of them can be dismissed by investors as short-term distortions.

Policymakers have tried to help by cutting bank reserve requirements to boost lending, and they have also attempted to soothe worries about scattergun crackdowns.

But that has yet to calm equity markets, which have shed about $1 trillion in value since February and still seem in search of a stable flows.

(5) Afghanistan Pullout Headlines

The aftershocks of the rapid fall of Afghanistan to Taliban insurgents will continue to be felt in the days ahead. There is little doubt as to the humanitarian impact of the crisis. The longer-term fallout for the region's economy and global markets is less certain — as is Washington's international role.

President Biden has seen his approval ratings drop to record lows, possibly making it harder for him to push through his agenda.

The relationship between the U.S. and Britain — Washington's staunchest European ally — looks under strain with Westminster lawmakers voicing unusual dissent.

Vice President Kamala Harris' visit to Singapore and Vietnam in coming days is aimed at countering China's growing influence.

But she will also have to contend with the Afghanistan crisis, which has left allies questioning the credibility of U.S. foreign policy promises.

Top Zacks #1 Rank (STRONG BUY) Stocks

(1) MercadoLibre (MELI Quick QuoteMELI - Free Report) : This is the Internet commerce darling of Latin America. I see an unbelievable $1,786 share price. This gives the stock a $88.8B market cap. I see a Zacks Value score of F (no surprise there!), a Zacks Growth score of A, and a Zacks Momentum score of A.

(2) TJX Companies (TJX Quick QuoteTJX - Free Report) : Surprised to see an in-store discount retailer on our #1 list? Don’t be. This is a $74 stock with a market cap of $89.3B. I see a Zacks Value score of F, a Zacks Growth score of D, and a Zacks Momentum score of B.

(3) BASF (BASFY Quick QuoteBASFY - Free Report) : This is the big German chemical firm. I see a low $19 share price, making for a $69.7B market cap. There is a Zacks Value score of C, a Zacks Growth score of D, and a Zacks Momentum score of D. When do the chemical stocks turn around? We shall see.

Key Global Macro

On Monday, the preliminary Euro area manufacturing PMI for August should be 62, down from a 62.8 prior.

The preliminary Euro area services PMI for August should be 59.8, stable with 59.8 in July.

The U.S. Markit composite PMI for August, in preliminary terms, looks to be 59.5.

On Tuesday, U.S. new homes sales for July could be down -2.7% m/m. Could some cooling be going on?

On Wednesday, U.S. durable goods ex-defense orders for July should be up +0.4% m/m.

The Kansas City Fed’s annual Jackson Hole symposium kicks off. Click the link I provided for the key papers today.

On Thursday, U.S. Q2 personal consumption expenditures (the PCE), the Fed’s preferred consumer inflation gauge, should be up +6.6% in annualized terms. That folks, is what is easily termed high.

On Friday, Fed Chair Powell gives a speech.

The University of Michigan consumer sentiment index should remain lowish at 71.5, after a 70.2 prior print. You can thank the Delta variant for that. Will the Fed care? We shall see.

Conclusion

Work-from-home has captured the Kansas City Fed’s Jackson Hole conference this year.

That might be wise. Given the smoke coming from the U.S. West’s many wildfires this summer. I am actually a bit surprised that climate change is not the key topic this year.

Perhaps one of the many secondary policy discussions will be?

It is a Finance-centered conference, though.

As to the K.C. Fed’s chosen headline topic of an uneven economy?

I need to make you aware of the “Fragile States Index” put together by the Fund for Peace (FFP), an American non-profit NGO founded in 1957.

The FFP “works to prevent violent conflict and promote sustainable security”.  To assist that goal, they develop a plethora of tools and metrics. Their website labels this as Smarter Approaches to a Complex World.

Included within that agenda, their Uneven Economic Development Indicator considers inequality within the economy, irrespective of the actual performance of an economy.

For example, the Uneven Economic Development Indicator looks at structural inequality that is based on group (such as racial, ethnic, religious, or other identity group) or based on education, economic status, or region (such as urban-rural divide).

The Uneven Economic Development Indicator considers not only actual inequality, but also perceptions of inequality, recognizing that perceptions of economic inequality can fuel grievance as much as real inequality, and can reinforce communal tensions or nationalistic rhetoric.

Further to measuring economic inequality, the Uneven Economic Development Indicator also takes into account the opportunities for groups to improve their economic status, such as through access to employment, education, or job training such that even if there is economic inequality present, to what degree it is structural and reinforcing.

Questions to consider may include:

Economic Equality

• Economic Equality – Gap: Is there a large economic gap?
• Discriminatory Economics: Is the economic system discriminatory?
• Economic Justice: Does economic justice exist?
• Hiring Practices: Are hiring practices generally fair – legally and the perception of others?
• Social System: Do equal rights exist in the society?
• Equal Rights Legislation: Are there laws protecting equal rights?

Economic Opportunity

• Free Education: Does free education exist and if so, to which grade?
• Equal Education: Is the education provided relatively equal?
• Fair Housing: Is there a housing system for the poor?
• Job Training: Do programs for job training exist?
• Access to Job Training: Use Do people know about the job training and is it available based on qualification and need?

Socio-Economic Dynamics

• Ghettos or Slums: Do ghettos and slums exist?

Still, the Jerome Powell speech is the only true market-moving event to watch out for.

This time of year, most traders are on vacation. So, don’t put too much emphasis on stock price movement, either.

Have a great late summer trading week.

Regards,

John Blank