European shares were largely down Thursday, though semiconductor companies were bucking that trend, as investors took stock of Nvidia's after-hours earnings and looked ahead to the annual Kansas City Federal Reserve conference in Jackson Hole Wyoming.
"While markets will naturally be focused on interest rates, the bigger story this year is Kevin Warsh's first appearance at Jackson Hole as Federal Reserve chair and what it may reveal about his vision for the future of the Fed," Isio Investment Management said, adding that the symposium is likely to be less about immediate policy decisions and more about understanding the longer-term direction of monetary policy.
All eyes will be on Warsh's keynote speech Friday but his aversion to providing forward guidance is well known, and Russell Investments contends the moment isn't right for a strident view.
That said, the speech is an early test of his communication strategy and credibility and he will need to strike a careful balance, Impax Asset Management said.
"A message perceived as too dovish could trigger further [Treasury] curve steepening, weigh on the dollar and support gold. Conversely, a more hawkish tone risks prompting markets to price a September rate hike."
