The reaction to Fed Chair Powell’s Jackson Hole speech and yields hold much of the answer regarding how stocks trade in the short term. The August jobs report on Friday should show investors how much momentum remains in the economy and impact market expectations in the cadence of future rate hikes.

Yields likely determine how stocks trade in the short term. Future Fed Funds rate expectations have started to climb again, which put pressure on the high growth and expensive valuation stocks. Chair Powell’s discussion at Jackson Hole on Friday will be crucial to the outlook for future rate hikes.

Berkshire’s $300 billion very concentrated investment portfolio comprises 47 companies, with energy stocks among the most significant exposure. Two holdings were eliminated, four decreased, and Berkshire increased stakes in nine companies.

Markets have cheered the better inflation news, but the timing and the path to a normalized environment remain unclear, with the sticky components of inflation remaining elevated. It looks like the worst year-over-year headline inflation rates are behind us, which is a step in the right direction.

Earnings season had its second busiest week, but the pace of the earnings reports declines precipitously this week. Earnings would be -3.7% year-over-year, excluding the energy sector. Cost pressures and inflation are a big part of the story of the struggles outside of the energy sector.

Berkshire Hathaway posted a quarterly loss of almost $44 billion versus a profit in 2021. Operating earnings, which remove the distortion from market changes, rose sharply by 39%. Berkshire made $6.2 billion in publicly-traded stock purchases for its portfolio.

Despite the increase in second-quarter estimates, expected earnings growth for 2022 held steady, implying a decline in the earnings estimates for the second half of the year, with pessimism growing around the global economy. Market participants will also be keen to see Friday’s July jobs report.