|Day's range||13.21 - 14.68|
|52-week range||8.56 - 50.30|
After gaining for three consecutive trading weeks, the S&P 500 opened this week on a weaker note by closing lower on Monday. On June 18, the S&P 500 opened the day lower and traded with weak market sentiment. Eight out of 11 major S&P 500 sectors closed the day lower on Monday. The weakness in the telecom services, consumer staples, and healthcare sectors weighed on the market. However, strength in the energy and utilities sectors limited the market losses. Market sentiment
US equity markets (VOO) remained largely unchanged in an eventful week that ended on June 15. Trade war uncertainty, geopolitics, and monetary policy decisions failed to dent investor confidence. The three central bank meetings solidified the divergent monetary policy narrative as the Fed remained hawkish. The European and Japanese central banks are likely to continue with the accommodative policy for the time being. The announcement of tariffs on Chinese imports reignited investor worries, but the impact was minimal.
Stock-market investors navigated, virtually unscathed, a gauntlet of central-bank gatherings, a historic summit between President Donald Trump and North Korean Kim Jong Un, and flaring trade tensions. The S&P 500 index(^GSPC)ended the week essentially flat, managing the narrowest of weekly gains, up 0.02% to 2,779.66, while the Dow Jones Industrial Average(^DJI)posted a weekly decline of 0.9%. The Nasdaq Composite Index(^IXIC)outperformed both, rising 1.3% for the five-day period.
After gaining in the first two trading days of the week, the S&P 500 pulled back on Wednesday. Following the pullback, the S&P 500 opened higher on June 14 and closed the day with limited gains. On Thursday, seven out of 11 major S&P 500 sectors closed the day higher. Strength in the utilities, consumer discretionary, and telecom services sectors supported the market. However, weakness in the financials and industrials sectors limited the market gains.
Rising real interest rates haven’t yet made for a sustained pickup in Treasury volatility, leaving some investors to ask what it would take to spark some turbulence. Danielle DiMartino Booth of Quill Intelligence said the European Central Bank, and not the Federal Reserve, holds the key as it looks to set a timetable for winding down its ultra-accommodative policies. With the Federal Reserve’s shrinking balance sheet unable to offset easy global financial conditions on its own, investors should closely watch the ECB at Thursday’s meeting where the central bank is expected to discuss the end of quantitative easing, though the actual wind-down almost certainly remains several months away at the earliest.
About 80% of S&P 500 Index companies reported first-quarter earnings that exceeded analysts’ estimates. The trigger was a return of implied volatility, as the CBOE Volatility Index (^VIX) briefly surged to 37 in February after averaging 11 in the previous 12 months. While the S&P 500 (^GSPC) rose or fell by more than 1 percentage point only eight times in 2017, already this year it has swung by that magnitude on 35 days.
Stock market sentiment is picking up once again, suggesting growing optimism but also heightened complacency. Among individual investors, 39% are bullish, the highest reading since February, in a weekly survey conducted by the American Association of Individual Investors. Signs of a pick-up in stock market sentiment suggest that calmer markets are luring investors back in, as The Wall Street Journal's Morning MoneyBeat newsletter noted on Friday.
Speculators are once again betting the stock market’s return to low volatility will persist despite the array of uncertainties it faces. Unlike last year, however, when amateurs piled into complex and risky exchange-traded funds that moved inversely to the VIX—the Cboe Volatility Index on options on the S&P 500—it’s professionals who have ramped up their short positions in VIX futures and options contracts his time. David Rosenberg, Gluskin Sheff’s lynx-eyed chief economist and strategist, points out speculative shorts in the VIX nearly doubled last week, to 44,380 futures and options contracts, from 25,556 the previous week, according to the most recent data from the Commodity Futures Trading Commission.
Donald Trump the President of the United States of America recently shifted his strict position about the denuclearization of North Korea.
One of Wall Street’s most popular indicators of market fear tumbled to its lowest level since late January as the Nasdaq Composite Index recorded a second record close in as many sessions, suggesting that the appetite for risk, perhaps alongside investor complacency, is re-emerging in the stock market. The Cboe Volatility Index VIX(^VIX), which measures expectations for volatility in the S&P 500 (^GSPC) over the coming 30 days, fell 2.7% to 12.40 on Tuesday, marking its lowest finish since it hit 11.08 on Jan. 26, contributing to the so-called fear gauge’s nearly 20% retreat thus far in June, according to FactSet data. The VIX has shed 8% in the first full week of the early month and has given up 34% over the past three months, though it is still up 12.3% year to date.
Wall Street gurus found all kinds of “reasons”: a political mini-crisis in Italy, President Trump’s slapping tariffs on some of our closest trading partners, and a grand slam of a jobs report that showed unemployment at 3.8%, an 18-year low. Investors are trying to gauge how much of the positive news already is priced into stocks and how much of the unpredictable they can actually quantify. The S&P has averaged 53 trading days of 1% moves or more annually since 1958, according to Jessica Rabe of DataTrek Research.
Traders leery of sharp declines after a wild few months in the U.S. equity markets could spring for stock hedges through options. As major U.S. stock indexes continued to rally, individual investors and institutional investors jumped in to ride the surge higher without any hedges. Because many compare their returns to stock indexes like the S&P 500, allocating money toward hedges that don't pay out makes them underperform in the short term.
The cryptocurrency market has rebounded in the last few days after steep declines last week. The total market cap was at $331 billion at the time of writing, compared to $323 billion on Tuesday.
Basically, Bitcoin is started to becoming the “money under the pillow” method for many investors due to the fact that they fear for some form of credit risk from the banks so they move there money from the standard assets to their basically own bitcoin wallet. “It seems there is a huge correlation right now between VIX and bitcoin 30 days ago, 30 trading days ago, that is starting to measure out credit risk in the market,” Stutland said.
After a bout of relative calm this month, volatility returned to Wall Street Tuesday as stocks tumbled. The Cboe Volatility Index (^VIX), or VIX, which measures expectations for volatility in the S&P 500 (^GSPC) over the coming 30 days, jumped by 38% to above 18 on Tuesday to hit the highest level in more than two months, as investors fled equity markets in favor of government bonds. The S&P 500 dropped 43 points, or 1.6%, to 2,677, its largest one-day decline since April 6, while the Dow Jones Industrial Average (^DJI) remained down more than 400 points.
This week’s economic calendar can best be defined as manufacturing-centric. Away from the FOMC minutes, scheduled for release on Wednesday afternoon, and Chair Jerome Powell’s scheduled talk on Friday morning, investors will be keeping a close eye on a sector of the economy that many had given up on — at least until November 2016. Today we got the Chicago Fed National Manufacturing Index, which surprised to the upside with a big revision to the prior month.
People are pretty good at identifying goals, whether in investment portfolios, careers or relationships. A backcast is an exercise where you imagine having reached a goal and then you work backward to figure out what happened to get you there. To see how a premortem can reveal serious weaknesses in investment strategy, look at the February collapse of several arcane products known as “inverse-VIX ETPs.” The CBOE Volatility Index, or VIX, (^VIX) measures the anticipated volatility of the stock market over the next 30 days.
The Cboe Volatility Index rose on Monday, suggesting its longest string of losses in a year was coming to an end. The VIX rose 4%, or 0.5 point, to 13.15. Thus far this year, the VIX is up 19%, though it is down nearly 32% over the past three months.
Fading inflation fears are one piece of the puzzleAFP/Stocks are floating higher. Don’t look now, but U.S. stocks are in a decided uptrend as a period of market anxieties appear to have faded—at least for the moment. In its wake is a rally has ensued, with the Dow Jones Industrial Average (^DJI) on Thursday matching its longest win streak—six straight days—since a similar stretch ended Feb. 16, according to FactSet data.