Powell speech, Gap gains and more: Friday's 5 things to know

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Here are the key events taking place on Friday’s that could impact trading.

JEROME POWELL: The Federal Reserve chairman’s remarks to investors and economists will be the marque event at the Fed’s annual symposium at Jackson Hole.

People will be looking for clues on where the Fed is heading on interest rates, mainly how big and for how long.

With inflation around 9%, Powell will likely stress that the Fed is determined to bring it down to its 2% target, no matter what it takes. 

FED’S POWELL IN JACKSON HOLE SPOTLIGHT WITH SPECULATION ON RATES

Federal Reserve Jerome Powell in a suit

Federal Reserve Chairman Jerome Powell. (AP Photo/Manuel Balce Ceneta / AP Newsroom)

The annual symposium is titled “Reassessing Constraints on the Economy and Policy,” and runs through Aug. 27.

The Fed’s favorite inflation gauge and a look at the mood of consumers also await investors Friday morning.

INCOME & SPENDING: Economists surveyed by Refinitiv anticipate spending to rise 0.4% month-over-month in July, above June’s 0.2% growth rate. Personal income, meantime, is expected to jump 0.6% in July, matching June’s gain. 

A woman buying items online

Woman in cafe shopping online with laptop. (iStock)

That brings us to the PCE Price Index, an inflation gauge that’s beginning to rival the consumer price index in popularity. It jumped 1.0% month-over-month in June and was up 6.8% from June 2021.

GDP SHRANK AT REVISED 0.6% RATE IN SECOND QUARTER

The Core PCE Price Index, which factors out volatile food and energy prices, is expected to rise 0.3% in July. The year-over-year change in the Core PCE Price Index, which is the Fed’s preferred measure of inflation, is anticipated to fall for the fourth time in 5 months to 4.7%. 

CONSUMER SENTIMENT: The University of Michigan’s final index for August is expected to inch higher to 55.2, up from the preliminary reading of 55.1 two weeks ago which came in higher than anticipated. 

It would also mark the second increase from an all-time low.

GAP INC.: Shares rebounded by 8% in pemarket trading despite the retailer pulling its annual forecasts as the chain struggles to sell its outdated Old Navy items, while inventory builds up as red-hot inflation forces people to cut discretionary spending.

Gap shopping bags

Shopping at the apparel retailer Gap Inc. (Dimas Ardian / Getty Images / Getty Images)

Gap, which beat quarterly revenue estimates, said sales trends improved in July and August, coinciding with a drop in gas prices.

The change in consumer choices led to a 13% decline in second-quarter sales at Gap’s Old Navy brand.

The company’s net loss stood at $49 million, or 13 cents per share, compared with a net profit of $258 million, or 67 cents per share, a year earlier.

Gap, which recorded an inventory impairment charge of $58 million, said stocks at the end of the second quarter were 37% higher from a year earlier.

Overall revenue of $3.86 billion topped estimates of $3.82 billion, according to IBES data from Refinitiv.

DELL TECHNOLOGIES: Shares fare off 4% in premarket trading after the company posted its slowest revenue growth in six quarters.

Dell’s revenue rose 9% to $26.43 billion in the quarter and was roughly in line with market expectations, according to Refinitiv data.

A Dell logo on a laptop

Dell Technologies Inc., is close to a deal to sell its Boomi cloud business to private-equity firms Francisco Partners and TPG, according to people familiar with the matter, part of a larger reordering of the PC and data-storage giant’s business. (Dell Technologies)

Consumer revenue fell 9%, but orders from businesses gearing up for the hybrid-work era pushed Dell’s commercial revenue up by 15% to $12.1 billion.

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Excluding items, Dell earned $1.68 per share.

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