ETFs, Stocks Waiting for Big Ben, Isaac

ETFs and U.S. stocks tread water on light volume, waiting for Dr. Bernanke’s Jackson Hole speech on Friday.

In quiet, summertime volume, U.S. exchange traded funds and stocks idled as economic reports on Thursday and Dr. Bernanke’s speech on Friday will be headline events for an otherwise quiet week.

Volumes are extremely light as major market participants take summer end vacations and everyone waits for Jackson Hole and September’s main events including the European Central Bank meeting on September 6th and the Federal Reserve meeting on September 12th.

ETFs for major stock indexes traded mostly flat at mid-day in New York with the Dow Jones Industrial Average (NYSEARCA:DIA) down 7 points, the S&P 500 (NYSEARCA:SPY) trading between small losses and gains, the Nasdaq 100 (NYSEARCA:QQQ) up 5 points.

Big movers were in oil (NYSEARCA:USO) which gained 0.7% to $96.15 as Tropical Storm Isaac was upgraded to a Category 1 Hurricane and headed towards the Gulf coast with landfall forecast on Wednesday which is the 7th anniversary of Hurricane Katrina. Katrina hit New Orleans as a Category 3 storm and so far Isaac is a Category 1. However, oil production and refining will be impacted to some extent as the Gulf represents more than 40% of U.S. oil refining and 20% of U.S. oil production. So far, more than 70% of regional oil production and 40% of natural gas production has been closed on account of Isaac’s approach.

Regarding Jackson Hole, investors anxiously await words from Dr. Bernanke regarding his plans for more quantitative easing and European Central Bank President Mario Draghi pulled a no show as he cancelled plans for a Saturday speech in the Tetons. People expect a hint of future Fed action but nothing substantive can occur until the Fed’s September meeting.

In Spain, the recession deepened with a 0.4% decline in GDP for the first quarter but Spanish bond yields declined.

Bottom line: Fundamentals continue to pose headwinds while technical indicators point to an ongoing bull market that is taking a pause in late summer doldrums. The breakout from the current consolidation pattern will likely determine further market direction as summer draws to a close and investors and institutions return in September. “Big Ben’s” Friday speech at 10:00 a.m. Eastern time will be the headline event of the week for U.S. stocks and ETFs.