S&P500: a correction or more?
By Elizaveta Belugina
On Monday Standard & Poor’s 500 fell below the 200-day MA (1,905) for the first time in 2 years extending its 3-day drop to almost 5%. The fall below an important technical and psychological level has contributed to the selloff. Energy, commodity, health-care and consumer discretionary companies lead the declines. Selling has intensified by the end of the session, as players didn’t want to hold overnight. It means that the short-term sentiment is really negative.
The Chicago Board Options Exchange Volatility Index (VIX), which measures the cost of options to protect against further declines in equities, jumped to the highest level since June 2012.
The main sources of concern are prospects for slowing global growth and the spread of Ebola. Traders are wondering whether improving US economy is able to withstand foreign weakness and a strengthening dollar. Many traders and analysts believe expansive Fed policy is behind the sharp run-up in stock prices since the financial crisis. The Fed’s planning to start rising rates next year, though officials admitted that the threat from overseas may delay rate increases in the US.
For now the correction hasn’t surpassed the normal levels. Note that the earnings season has started in the US, and companies that were profitable 2 months ago may see their share prices run up again. According to the forecasts, profit for companies in S&P 500 probably rose 4.8% and sales gained 4.2 % in Q3. The sharp moves may only increase investor interest in the corporate reports.
Market players want reassurance that the US economy is on track despite global growth concerns. This week the releases will be largely finance-centric, so they won’t provide much clarity. But there are global operators like General Electric, Intel, and others that will shed some light on this issue.
14 Oct BMO Q3 2014 Citigroup Inc
14 Oct AMC Q3 2014 CSX Corp.
14 Oct AMC Q3 2014 Intel Corp.
14 Oct BMO Q3 2014 Johnson & Johnson
14 Oct 11:00 Q3 2014 JPMorgan Chase & Co.
14 Oct AMC Q1 2015 Linear Technology Corp
14 Oct 12:00 Q3 2014 Wells Fargo
15 Oct AMC Q3 2014 American Express Co
15 Oct 11:00 Q3 2014 Bank of America Corp
15 Oct BMO Q3 2014 BlackRock Inc
15 Oct AMC Q3 2014 eBay Inc
15 Oct BMO Q3 2014 KeyCorp
15 Oct AMC Q3 2014 Kinder Morgan Inc
15 Oct AMC Q3 2014 Navient Corp
15 Oct AMC Q3 2014 Netflix Inc
15 Oct BMO Q3 2014 PNC Financial Services Group Inc
15 Oct BMO Q3 2014 Charles Schwab Corp
15 Oct BMO Q3 2014 St. Jude Medical Inc
15 Oct AMC Q3 2014 United Rentals Inc
16 Oct BMO Q3 2014 Alliance Data Systems Corp
16 Oct BMO Q3 2014 Baxter International Inc
16 Oct BMO Q3 2014 BB&T Corp
16 Oct BMO Q3 2014 Baker Hughes Incorporated
16 Oct AMC Q3 2014 Capital One Financial Corp
16 Oct BMO Q3 2014 Delta Air Lines
16 Oct BMO Q3 2014 Danaher Corp
16 Oct 11:00 Q3 2014 Dover Corp
16 Oct BMO Q3 2014 Fifth Third Bancorp
16 Oct AMC Q3 2014 Google Inc
16 Oct BMO Q3 2014 Goldman Sachs
16 Oct BMO Q3 2014 Grainger
16 Oct BMO Q3 2014 Mattel Inc
16 Oct AMC Q3 2014 People's United Financial Inc.
16 Oct BMO Q3 2014 Philip Morris International
16 Oct BMO Q3 2014 PPG Industries Inc
16 Oct AMC Q3 2014 Schlumberger NV
16 Oct BMO Q3 2014 Snap-On Inc
16 Oct AMC Q3 2014 SanDisk Corp
16 Oct 20:00 Q3 2014 Stryker
16 Oct BMO Q3 2014 UnitedHealth Group Inc
16 Oct AMC Q2 2015 Xilinx Inc
17 Oct BMO Q3 2014 Bank of New York Mellon Corp
17 Oct BMO Q3 2014 Comerica Inc
17 Oct BMO Q3 2014 General Electric Co
17 Oct BMO Q3 2014 Huntington Bancshares Inc
17 Oct BMO Q3 2014 Honeywell International Inc
17 Oct BMO Q3 2014 Kansas City Southern
17 Oct BMO Q3 2014 Morgan Stanley
17 Oct BMO Q3 2014 SunTrust Banks Inc
17 Oct BMO Q3 2014 Textron Inc