\n\tBy Greg Peel<\/p>\n
\n\tThe Dow fell 21 points or 0.2% while the S&P lost 0.1% to 1409 and the Nasdaq<\/span> gained 0.1%.<\/p>\n \n\tBen Bernanke's speech, to be delivered on Friday night at Jackson Hole, will be entitled “Monetary Policy Since The Crisis”. The title suggests more of a recap than a plan, which may disappoint some in the market. However the majority of observers are not expecting any major policy hints from Wyoming this year given the timing. Jackson Hole and the official FOMC<\/span> meeting on September 13 will top and tail all the ECB<\/span> action, being the official meeting on September 6 and the German court ruling on September 12.<\/p>\n \n\tIt is suggested, nevertheless, that if the Fed chairman's speech lauds the success of quantitative easing to date then another round is more likely.<\/p>\n \n\tWith September 6 looming and much to negotiate, ECB<\/span> president Mario Draghi<\/span> has decided he is just too busy to attend Jackson Hole. While this is undoubtedly fair, he may also not wish to turn up unable as yet to deliver anything new. It will not be lost on Draghi<\/span> that the world is hanging on his every syllable, such that even the mere panel discussion he was slated to join on the Saturday would be so closely monitored that a lack of new news would potentially prove a big disappointment for markets.<\/p>\n \n\tGiven Draghi<\/span> has vowed to do “whatever it takes” to save the euro, one presumes he would have acted by now were he not hamstrung and no doubt frustrated by at least three obstructions. Firstly, while saving Spain would be the main objective of any ECB<\/span> action, Spain must first approach the ECB<\/span> to be saved and as yet has not done so. One is somehow reminded that it is possible to get out of flying bombing raids if one is deemed crazy, but if one asks to get out of flying on the basis of being crazy then one by definition cannot be crazy.<\/p>\n \n\tSecondly, the German central bank remains vehemently opposed to the European Central Bank buying the bonds of specific eurozone<\/span> members. It might prove difficult for the ECB<\/span> to act without the Bundesbank's<\/span> cooperation. And thirdly, in a similar vein, Draghi<\/span> cannot move until the challenge against Germany's participation in the ESM<\/span> is dismissed in the German constitutional court. Pundits expect such a dismissal, but uncertainty remains.<\/p>\n \n\tBusy? Draghi's<\/span> team is reported to be working around the clock in an attempt to throw up possible solutions, and potentially ways Draghi<\/span> can have something decisive to say that the world wants to hear on September 6. Draghi<\/span> is no doubt in the ear of the Spanish president and in constant debate with the head of the Bundesbank<\/span>. As for the rest of us, we can only but wait. And wait.<\/p>\n \n\tTalk on Wall Street last night was of Draghi's<\/span> pull-out likely being a positive, rather than a negative sign. Hence the market was not trashed, but having hit previous highs last week it's safer just to square up rather than risk pushing on. Hence again Wall Street drifted lower on little volume.<\/p>\n \n\tLast night's US economic data releases provided mixed signals. The good news was the Case-Shiller<\/span> 20-city house price index rose 2.3% in June to take the year on year number to 0.5% higher. That's the first yoy<\/span> increase in two years. The so-so news was that the Richmond Fed manufacturing index has improved this month, but only to lesser contraction (minus 9 from minus 17 in July). The bad news is the Conference Board consumer confidence measure has fallen to 60.6 this month from 65.4 last month, while economists expected an improvement. That's the lowest level since last November.<\/p>\n \n\tThe weak consumer confidence read does not correlate with recently improved retail sales data, suggesting Americans are saying one thing, but doing another. Nevertheless, if the above three data points are representative of the state of the US economy at present, again we ask: does it need QE3?<\/p>\n \n\tThe other point of focus at present is of course Tropical Storm Isaac, which last night became Hurricane Isaac. Isaac is making his way very slowly towards New Orleans and its much improved levies and while bad, it is not nearly as bad as Katrina, experts suggest. The point of issue is nevertheless what damage Isaac might possibly wreak on Louisiana's refineries, ports and pipelines and how that might affect the price of gasoline.<\/p>\n \n\tIf last night's trade is any gauge, not much. Only half of the Gulf coast refineries have shut down as a precaution, with the others simply keeping a weather eye. Gasoline futures did not move much last night and for reasons explained in this Report yesterday, oil prices didn't move much either. Brent was up US32c to US$112.58\/bbl and West Texas was up US76c to US$96.23\/bbl.<\/p>\n \n\tElsewhere, market moves were not significant. Draghi's pull-out primed the euro, sending the US dollar index down 0.4% to 81.36. Gold dutifully rose US$2.70 to U$1666.60\/oz, while the Aussie is little changed at US$1.0378. Having been closed on Monday night, base metals went the wrong way and came off slightly. The US bond rates have stalled for the time being, with the ten-year yield sitting around 1.63%.<\/p>\n \n\tThe SPI Overnight was up 6 points.<\/p>\n \n\tThe Fed will release its Beige Book tonight in the US and the first revision of the first estimate of June quarter GDP will be made, with consensus suggesting a rise to 1.7% from 1.5%. Ahead of that, Australia will see June quarter construction work done as a precursor to our own GDP release next month.<\/p>\n \n\tThe earnings season stragglers continue to roll in today, with Transfield<\/span> Services ((TSE<\/span>)) and WorleyParsons<\/span> ((WOR<\/span>)) among the mix.<\/p>\n