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S&P 500 Fundamental Analysis – for the week of August 22, 2016 -Forecast

By:
Barry Norman
Published: Aug 20, 2016, 07:13 UTC

The S&P 500 continued to new highs this week and closed at 2181.50 with a slight decline but the index is up over 7% for the year. The lower dollar

S&P 500 Fundamental Analysis – for the week of August 22, 2016 -Forecast

The S&P 500 continued to new highs this week and closed at 2181.50 with a slight decline but the index is up over 7% for the year. The lower dollar helped stocks rally as well as climbing oil prices. Investors were anxious ahead of a Federal Reserve symposium this week which may reveal more about the timing of any US interest rate hike, while the steel sector reeled from China’s failure so far to curb output.

But oil prices, which were flat at mid-session, rallied late in the session. The West Texas Intermediate was up 0.6% to $48.50. That helped the market bellwether S&P 500 to narrow its losses and end down 0.1% at 2,183 – just three points adrift of where it began the week on Monday.

The worries were doubled this week after New York Fed, and Fed Chair Janet Yellen’s right-hand man William Dudley said markets had grown too complacent about a no hike strategy. He said a September hike was back on the table. Although minutes from the July Fed meeting showed policymakers were divided, Dudley’s comments were more recent and investor began to reassess the situation to the hawkish side.

“The FOMC minutes on Wednesday highlighted the clear divide among policy makers on Wednesday, between those that believed a hike was near and those that wanted more data, making a September rise all the more unlikely. While the markets didn’t believe this would happen anyway, they had just about priced in a hike in December prior to the release, which has now once again been pushed back to March next year,” suggested trading platform operator OANDA.

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Upcoming Economic Events that you should be monitoring:

Week of August 22-25, 2016

Date Country Name Volatility Previous
8/23/2016 GBP Inflation Report 3
8/24/2016 EUR GDP w.d.a (YoY) 3 1.8
8/24/2016 EUR GBP s.a (QoQ) 3 0.4
8/24/2016 EUR GDP n.s.a (YoY) 3 3.1

Government Bond Auctions

Date Time Country Auction

Aug 22 10:30 Germany Eur 1.5bn Aug 2017 Bubill

Aug 23 16:20 Italy Announces details of bond auction

Aug 23 18:00 US Holds 2yr note auction

Aug 24 10:03 Sweden Holds bond auction

Aug 24 10:30 Germany Eur 4bn 0% Oct 2021 Bobl

Aug 24 18:00 US Holds 2yr FRN auction & 5yr note auction

Aug 25 18:00 US Holds 7yr note auction

Aug 26 10:10 Italy Holds zero coupon

 

 

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