101
Currency Analyst since 2010

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    

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