With the Fed's symposium in Jackson Hole kicking off today, the focal point of the markets remains on monetary policy on this very quiet late-summer morning. Today another Fed Governor has joined the rate hike camp as Kansas City Fed President Esther George told CNBC that it is now time to gradually raise rates.

George joins Dallas Fed President Robert Kaplan, FOMC Vice Chair Stanley Fischer and New York Fed President William Dudley on the list of Fed officials calling for rate hikes. However, one of the key worries amongst the fast-money trading crowd is that the markets are not listening to the commentary from FOMC members.

For example, Fed Funds futures are currently predicting only a 53% chance of a rate hike in calendar year 2016, which, of course is only a bit higher than coin flip. So, given the current overbought condition and the complacency seen in many indicators, the bears tell us that stocks are now "set up" for disappointment if Ms. Yellen's speech takes on a more hawkish tone than expected tomorrow.

While no one expects Yellen to deliver an uber-dovish message, the consensus seems to be that the Fed Chair won't provide any surprises such as suggesting that rates will rise in September - or even December. Yet, after listening to the commentary coming out of the FOMC members lately, it seems that the markets may not be properly gaming the prospects for a rate hike in December. Therefore, tomorrow could contain some fireworks if Yellen produces any surprises.

As I mentioned yesterday, we are also continuing to watch copper prices. While the recent crater in prices is likely linked to China's announcement that it will be importing less industrial metals, one can't help but fret about the global growth issue when the price action looks the way it does now. And although copper prices are higher this morning, I for one will continue to glance at symbol JJC during the day this week.

Other than that, things look very, very, very quiet so far. But stay tuned, this market can always change at the drop of a hat!

Publishing Note: I am traveling the rest of this week with a couple very early meetings. Thus, reports will be published as my schedule permits.

Current Market Drivers

We strive to identify the driving forces behind the market action on a daily basis. The thinking is that if we can both identify and understand why stocks are doing what they are doing on a short-term basis; we are not likely to be surprised/blind-sided by a big move. Listed below are what we believe to be the driving forces of the current market (Listed in order of importance).

      1. The State of Global Central Bank Policies
      2. The State of U.S. Economic Growth
      3. The State of Oil Prices

Thought For The Day:

"True wisdom comes to each of us when we realize how little we understand about life, ourselves, & the world around us" -- Socrates

Wishing you green screens and all the best for a great day,

David D. Moenning
Chief Investment Officer
Sowell Management Services

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Disclosures

The opinions and forecasts expressed herein are those of Mr. David Moenning and may not actually come to pass. Mr. Moenning's opinions and viewpoints regarding the future of the markets should not be construed as recommendations. The analysis and information in this report is for informational purposes only. No part of the material presented in this report is intended as an investment recommendation or investment advice. Neither the information nor any opinion expressed constitutes a solicitation to purchase or sell securities or any investment program.

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