As the trading day draws to a close, here are the key events markets should watch for tomorrow, Thursday, August 22, 2024:

Several major companies are set to report earnings, including BJ's Wholesale (BJ), Ross (ROST), Dollar Tree (DLTR), and Peloton (PTON). The results will provide further insights into the state of the consumer, which has shown a mixed picture based on recent reports from other retail names.

On the economic front, investors will be closely watching the initial jobless claims data. Economists believe the figure will rise to 232,000, up from 227,000 the prior week.

Finally, the highly anticipated Jackson Hole Economic Policy Symposium kicks off, with all eyes on Federal Reserve Chair Jerome Powell's commentary on Friday.

Market Volatility and the Jackson Hole Symposium

The recent market pattern of a lower dollar and rising stocks took a turn yesterday, largely due to concerns over Fed Chair Powell’s potentially hawkish speech at the Jackson Hole Symposium. This shift was also supported by another round of U.S. economic data pointing to a sluggish economy.

The market's focus this week is undoubtedly on Powell's speech at the Jackson Hole Symposium, scheduled for 14:00 GMT. This event is crucial as it often serves as a platform for the Federal Reserve’s key policy announcements. The market is anticipating a potential rate cut in September, with some even predicting three rate cuts by the end of the year.

While the market has already priced in at least three rate cuts, Powell's statement at the symposium would be a significant market-moving event. A dovish tone, even if it sidesteps questions about a 50 basis point cut, would likely send the USD back on a downward trajectory.

Retail Earnings and Consumer Sentiment

Several retail giants are set to release their earnings reports, offering insights into the state of the consumer. Peloton (PTON) will be closely watched, as the company posted a 0.2% increase in sales for the fourth quarter, the first year-on-year growth since the second quarter of 2022. The company also unveiled positive free cash flow for a second consecutive quarter, hinting at a possible turnaround.

Target's (TGT:NYSE) second-quarter results surprised investors with a return to sales growth, driven by price cuts and improving discretionary spending. Comparable sales ticked up by 2%, the first rise in five quarters.

However, Macy's (M:NYSE) provided a more cautious outlook, cutting its full-year sales forecast due to ongoing promotions and a more price-sensitive consumer. The iconic department store operator saw revenue fall 3.8% year-on-year, missing market expectations.

These earnings reports will provide valuable insights into the resilience of the consumer in the face of inflation and economic uncertainty.

Gold and the USD's Comeback

Gold reached a new all-time high of $2,531 earlier this week but has since pulled back, dropping $40 today despite positive U.S. economic data. The recent strength of the U.S. dollar, fueled by positive economic data, has put pressure on gold.

Home sales showed a surprising gain, reversing the downward trend of recent months, while the Services PMI surged past 55 points, signaling solid expansion in that sector. This data has strengthened the U.S. dollar, putting pressure on other assets, including gold (XA), which fell below $2,470 before finding some support.

A Look at the Currency Markets

The GBP/USD pair has shown impressive strength, rebounding off the moving averages on the daily chart. Yesterday’s strong UK Services and Manufacturing PMI data drove the pair to 1.3130, although it later slipped below 1.31, where the 50-day SMA (yellow) provided support.

The U.S. dollar gained strength in a sharp, one-leg rise, which then moved sideways. Attempts to push the dollar higher, fueled by a weaker TIPS auction and declining stocks, were unsuccessful as the euro resisted falling below 1.11.

The Week Ahead: A Pivotal Moment for the Market

This week promises to be a pivotal one for the market, with investors eagerly awaiting Powell's speech at the Jackson Hole Symposium. The Fed Chair's comments will set the tone for the remainder of the year, influencing the direction of interest rates, the U.S. dollar, and ultimately, the global economy. Stay tuned for more updates as the week unfolds.