The Watchlist for the Week Ahead:
We begin this week with three items on our mind that could drive financial and commodity market volatility as we head into September:
- Hawkish Federal Policy: At the Jackson Hole event, Chair Powell argued for holding interest rates steady for now, but kept the door open to raising them later this year should the economy fail to contact enough to continue driving inflation down (i.e. towards the Fed’s 2% target.) Given that the share prices for Dollar Tree, Ulta Beauty, Best Buy, and Target fell 7% to 14% on signs of a slowdown in consumer spending, we think that restrictive monetary policy is starting to bear fruit.
- New China/Geopolitical Angst: Apparently, China has offered to build a nuclear-power plant in Saudi Arabia, a move that helps the Kingdom pressure the Biden administration to compromise on its conditions for U.S. help in Riyadh’s quest for nuclear power.
- More Catastrophe Losses Possible: On Sunday night we learned that the National Hurricane Center called for Tropical Storm Idalia to strike Florida’s “Big Bend” area as a Category 2 hurricane on Wednesday—and potentially becoming a Category 1—bringing with it 100+ mph winds and up to 11 feet of storm surge. This event follows a busy prior two weeks for adverse weather, including Tropical Storm Franklin (Dominican Republic), Tropical Storm Hillary (California) and Tropical Harold (Texas)
Upcoming Events and Catalysts
Monday 8/28/2023
- USDA Reports: Livestock & Meat (ERS), Peanut Processing, Crop Progress
- U.S. Economic Reports: Dallas Fed Manufacturing Survey, Oil Price Dynamics
Tuesday 8/29/2023
- Farm Progress Show, August 29-31st Decatur, Illinois
- USDA Agricultural Exchange Rate Data Set
- U.S. Economic Reports: Consumer Confidence, JOLTS, Dallas Fed Texas Retail Outlook Survey
Wednesday 8/30/2023
- USDA Rice Stocks, Cold Storage reports
- U.S. Economic Reports: Advance International Trade In Goods, Gross Domestic Product 2nd Release, Corporate Bond Market Distress Index, Pending Home Sales
Thursday 8/31/2203
- 9 USDA Reports including: Weekly Export Sales, Highlights From the August 2023 Farm Income Forecast, Outlook for U.S. Agricultural Trade: August 2023 and Agricultural Prices
- U.S. Economic Reports: Initial Jobless Claims, Personal Income and PCE Deflator, Weekly Economic Index
Friday 9/1/2023
- U.S. Economic Reports: Payrolls
Monday, 9/4/2023
- LABOR DAY HOLIDAY – The Executive Briefing will be on Holiday
Month-to-Date Flash Grain Sales (Via USDA and Reuters reporting)
Numbers of Interest
-7% to -14% Represents the range of share price declines last week for Target, Best Buy, Ulta Beauty and Dollar Tree due to signs of a slowdown in consumer spending
11 The number of feet of expected storm surge that could be inflicted on Florida should Tropical Storm Idalia become a Category 1 or 2 hurricane this coming Wednesday
+$436,700 Median sales price for a new house in July, up from $415,400 in May
$6.2 billion NVDA’s profit for the latest quarter
$196 billion Annualized amount of U.S. manufacturing construction spending (as of June 2023), up 80% from a year earlier and the highest in several decades according to the U.S. Census Bureau
Kenneth Scott Zuckerberg is Lead Industry Analyst, Farm Supply & Biofuels, CoBank
