empty
 
 
20.09.2021 11:34 AM
S&P 500 plunges to four-week lows

US stocks slipped to four-week lows last Friday, while bond yields surged when investors assessed the sustainability of the global recovery amid concerns over the Delta strain and risks from China.

The fall happened on the eve of the quarterly expiration of options and futures, during which the materials and technology sector pushed the S&P 500 down for the second week. It led to a 0.85% decline, so the index closed below the 50 MA, which is the key level that provided support during previous sell-offs this year.

This image is no longer relevant

"September is starting off in typical fashion, with stocks struggling to maintain optimism in the face of a likely pending shift in Fed policy, slower growth and uncomfortably high inflation," said Gina Martin Adams from Bloomberg Intelligence.

At the same time, the University of Michigan reported that US consumer sentiment rose slightly in early September, but remained close to nearly a decade low. Apparently, buying conditions deteriorated to their worst since 1980 due to high prices.

"We're not necessarily in a period of a lot of negative catalysts, we're in a period of a lack of positive catalysts," said Randy Frederick, managing director of trading and derivatives with the Schwab Center for Financial Research. "And we may not get a huge amount of upside momentum until we get something positive like potentially earnings, which is still a couple of weeks out," he added.

Global stocks are expecting another drop this week because of the Delta strain and increased inflation and turmoil in China. As such, the Federal Reserve will most likely hint at potential tapering on monthly bond purchases during its meeting next week, and then make an official announcement in November.

As for the ECB, governing council member Martins Kazaks said inflation in the Euro area could exceed expectations, provided that the coronavirus does not trigger new shocks.

And even if the commodity price index has fallen, it remains near the record high in 2011, which stresses concerns about inflation spreading to the global economy.

Andrey Shevchenko,
Analytical expert of InstaForex
© 2007-2024
Earn on cryptocurrency rate changes with InstaForex
Download MetaTrader 4 and open your first trade
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    JOIN CONTEST
  • Chancy Deposit
    Deposit your account with $3,000 and get $8000 more!
    In March we raffle $8000 within the Chancy Deposit campaign!
    Get a chance to win by depositing $3,000 to a trading account. Having fulfilled this condition, you become a campaign participant.
    JOIN CONTEST
  • Trade Wise, Win Device
    Top up your account with at least $500, sign up for the contest, and get a chance to win mobile devices.
    JOIN CONTEST
  • 100% Bonus
    Your unique opportunity to get a 100% bonus on your deposit
    GET BONUS
  • 55% Bonus
    Apply for a 55% bonus on your every deposit
    GET BONUS
  • 30% Bonus
    Receive a 30% bonus every time you top up your account
    GET BONUS

Recommended Stories

Can't speak right now?
Ask your question in the chat.
Widget callback