S&P 500 INDEX PRICE OUTLOOK: VIX ‘FEAR-GAUGE’ BUOYED BY DEMAND FOR DOWNSIDE PROTECTION AMID CORONAVIRUS STIMULUS STALEMATES&a
S&P 500 INDEX PRICE OUTLOOK: VIX ‘FEAR-GAUGE’ BUOYED BY DEMAND FOR DOWNSIDE PROTECTION AMID CORONAVIRUS STIMULUS STALEMATE
- S&P 500 value motion makes an attempt to gravitate larger as massive tech leads the way in which
- VIX Index ‘fear-gauge’ stays perky amid ongoing coronavirus stimulus talks
- Shares look vulnerable to heading decrease if congress fails to interrupt the deadlock
The S&P 500 is ready to shut out a extensively uneventful but uneven buying and selling session barely larger on the day. Different main US inventory market benchmarks just like the Dow Jones and Nasdaq replicate equally inexperienced however total muted modifications in efficiency. With high-profile earnings releases from a few of the greatest firms by market cap within the rearview mirror, traders appear to have shifted focus to a different overarching basic driver of equities: fiscal stimulus.
| Change in | Longs | Shorts | OI |
| Day by day | 5% | 4% | 4% |
| Weekly | -23% | 14% | 2% |
In accordance with the newest stimulus headlines, US Treasury Secretary Steven Mnuchin said that congress isn’t any nearer to reaching a deal on one other spherical of coronavirus stimulus than they had been final week. This follows politicians letting the additional $600 month-to-month unemployment insurance coverage profit offered within the wake of COVID-19 expire this previous weekend. That mentioned, Mnuchin simply flirted the concept President Trump and his administration are drafting potential government actions if congress fails to interrupt the deadlock, which appeared to assist bolster shares off intraday lows.
S&P 500 PRICE CHART WITH VIX INDEX OVERLAID: DAILY TIME FRAME (DEC 2019 TO AUG 2020)
Chart created by @RichDvorakFX with TradingView
S&P 500 value motion this afternoon helped spotlight how traders are largely fiending for extra fiscal assist to reinvigorate the inventory market rally off of March’s trough. In the meantime, the VIX Index, or fear-gauge, hints at lingering skepticism in direction of the S&P 500 buying and selling constructive year-to-date and about 3% beneath its file excessive. The S&P 500 VIX Index usually rises during times of uncertainty and threat aversion as traders search to hedge towards potential draw back in shares.
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On that observe, the S&P 500 could possibly be on the cusp of a bigger reversal and should quickly face a day of reckoning in gentle of the present fiscal stimulus stalemate. This bearish state of affairs may warrant extra credence the longer politicians drag their ft and Individuals battle to pay their payments. To not point out, weekly jobless claims information has climbed larger for the previous three weeks in a row and exhibits 17-million Individuals persevering with to file for unemployment insurance coverage. Moreover, the month-to-month nonfarm payrolls report for July is slated to cross the wires this coming Friday at 12:30 GMT, which may weigh significantly on urge for food for threat and thus S&P 500 value motion.
— Written by Wealthy Dvorak, Analyst for DailyFX.com
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