S&P 500; US Indexes Fundamental Forecast – August 25, 2016

U.S. stock index futures spent most of the day on the negative side with healthcare stocks leading the major indices lower, dropping more than 1.5 percent. General nervousness ahead of Fed Chair Janet Yellen’s speech on Friday also weighed on investor sentiment. Trading conditions were thin for a third day as many of the major funds and institutions remained on the sidelines.

During the low volume session, most investors sat tight, keeping their powder dry ahead of Yellen’s speech where she may over more clarity as to the timing of the next Fed rate hike. Some, however, reacted negatively to comments from Democratic presidential nominee Hillary Clinton. She is being blamed for the start of the sell-off in the health care sector.

Apparently, the selling started when Clinton tweeted about the recent price hikes on EpiPens, marking the second time in about a year the sector was pressured by a comment from her.

The drop in healthcare drove the S&P 500 about 0.5 percent lower. The Dow Jones Industrial Average was down about 60 points with UnitedHealth Group contributing the most to the loss.

Low volume coupled with a U.S. Durable Goods report could produce volatility on Thursday. After that report at 1230 GMT, volume is expected to drop even further as investors prepare for Friday’s U.S. GDP report and Yellen’s speech.

We expect to see the downside pressure to continue as investors don’t appear to be in too much of a hurry to get back in. This may be the first sign that investors are thinking about value rather than just buying the technical momentum.

FxEmpire provides in-depth analysis for each asset we review. Fundamental analysis is provided in three components. We provide a detailed monthly analysis and forecast at the beginning of each month. Then we provide more up to the data analysis and information in our weekly reports, which covers the current week and are published by Sunday before the new week begins. Daily we share any new events, forecasts or analysis that affect the current day. To achieve a full accurate understanding it is important that you study all of our data and analysis as a whole.

Today’s economic releases:

Upcoming Economic Events that you should be monitoring:

Thursday, August 25, 2016

Government Bond Auctions

Date/Time Country Type

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