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Market Insight: Why Markets Could Remain Calm this Week

PART:
1 2 3 4 5 6 7
Part 2
Market Insight: Why Markets Could Remain Calm this Week PART 2 OF 7

What’s in Store for the S&P 500 Index this Week?

S&P 500 Index record show continues

For the week ending November 3, the S&P 500 index (SPY) closed at 2,587, recording gains of 0.26% for the week. Positive earnings—coupled with the possibility of a market-friendly tax reform—helped the index continue its rise. The US FOMC statement and the confirmation of the next Fed chair, though positive, had little to no impact on the index.

Financials (XLF) were at the bottom of the performance table last week as a more-dovish-than-expected FOMC statement weighed on bank stocks. The information technology (XLK) and healthcare (XLV) sectors were the best-performing sectors for the week ending November 3.

What&#8217;s in Store for the S&amp;P 500 Index this Week?

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Speculators added bullish bets last week                                           

For the week ending November 3, large speculators of the S&P 500 (IVV) index increased the number of net bullish positions to 32,018 contracts from 26,432 contracts. This data was reported by the Commodity Futures Trading Commission (or CFTC) through their weekly “Commitment of Traders” report (or COT). With positive earnings pouring in and the Trump administration getting closer to making tax reform a reality, speculators remain invested for higher levels of the S&P 500 index.

Outlook for the S&P 500 index

There are no major economic events in the US markets this week, but there are a few geopolitical issues that could impact the US and global markets. The power struggle in Saudi Arabia could lead to some uncertainty. Oil prices shot up in Asian trading on November 6, and the Asian indexes are trading lower at the time of this report. Oil price rises could favor some heavyweights in the S&P 500 index, but the overall markets are likely to remain rangebound this week.

In the next part of this series, we’ll understand why negative macro developments couldn’t drag the US dollar lower.

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