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Will the S&P 500 Index Hold on to 2,500 This Week?

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S&P 500 Index held on to 2,500 last week

The S&P 500 Index (SPY) closed the week ending September 22 at 2,500.2 with no change as compared to the week ending September 15. What is surprising is that the index closed above the 2,500 level on all the trading days despite many news and economic reports that would usually warrant a minor sell-off in this major US index. US President Donald Trump’s strong words at the UN and the possibility of a rate hike from the US Fed failed to dent investor confidence.

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There was a change in how different sectors in the S&P 500 Index (IVW) reacted in the previous week ending September 22. The financials (XLF) and energy (XLE) sectors were the top performers, reflecting the positive change in their industries’ fundamentals, while the real estate, utilities, and consumer staples sectors posted losses as rising rates could impact these industries’ future profits.

Speculators pared bullish bets on the S&P 500 Index

For the week ending September 22, large speculators of the S&P 500 (IVV) index decreased their net bullish positions from 31,770 to 21,137 contracts in the previous week. This data was reported in the Commodity Futures Trading Commission’s (or CFTC) Commitment of Traders (or COT) report.

Will the S&P 500 Index hold on to its gains?

Investors and traders will focus on US consumer confidence, durable goods orders, personal income and spending data, and US 2Q GDP data, which is scheduled to be reported this week. International markets have not reacted well to German polls, which have suggested that Angela Merkel will form a coalition government. We must wait for the US market’s reaction, but in a market where any negative news is being digested quickly, there may be no reason for this scenario to be any different. Any new information about US tax reform is likely to lend support to the index this week.

In the next part of this series, we’ll analyze how the US dollar (USDU) rallied after a hawkish FOMC statement.

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