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Speculator Positions on the S&P 500 for the Week Ended May 11

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S&P 500 Index helped by strong earnings

For the week that ended May 11, the S&P 500 Index closed at 2,727.72, rising 2.4% compared to its previous week’s close of 2,663.42. Fears about risk-off selling after President Donald Trump’s Iran deal pullout were pushed aside by stellar earnings from constituent companies.

As the first-quarter earnings season comes to an end, more than 80% of companies have beaten their earnings and revenue estimates, which has helped investors ignore the possible fallout of a US pullout from the Iran nuclear deal.

Last week, the charge for the S&P 500 Index was led by the energy (XLE) (+3.9%) and financial (XLF) (+3.6%) sectors, which benefited from rising oil prices and bond yields. Utilities and consumer staples sectors were the only sectors that had negative returns in the week.

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Speculators’ positions on the S&P 500 Index

Large speculators of the S&P 500 Index, including hedge funds, increased their net bullish positions last week. Net long S&P 500 e-mini contracts were down 66,878 contracts from 229,233 contracts to 162,355 contracts. These data were reported by the Commodity Futures Trading Commission through its weekly Commitments of Traders report. The data coincided with the Iran deal pullout on May 8, and traders would have pulled their positions back after the muted reaction to the geopolitical risk event.

As per the data from ETF.com, ETFs that track the S&P 500 Index, such as the SPDR S&P 500 ETF (SPY), had negative fund flows with outflows of $3.1 billion, while the iShares S&P 500 (IVV) and the Vanguard S&P 500 (VOO) had inflows of $4.4 billion and $388 million, respectively.

The outlook for the S&P 500 Index

Going forward, the upbeat first-quarter earnings could drive positive momentum, signaling that we may have seen a near-term bottom. Reports about constructive trade negotiations between the United States and China would add to the upswing in the markets this week. The economic calendar is thin, with retail sales and housing data being the main reports and unlikely to sway the positive outlook. In the next part of this series, we’ll analyze the performance of the US bond markets last week.

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