The S&P 500 index has had a decent run this year, gaining 14.2% year-to-date. Despite the overall gains, the index has undergone periods of volatility due to the uncertain macroeconomic and geopolitical environment, as is evident from the index’s 1.9% decline over the past three months.
The SPDR S&P 500 ETF Trust (SPY – Get Rating), which closely tracks the S&P 500 for returns, could be a solid buy now for reasons explained throughout this article.
Last week, something rare occurred as the SPY saw back-to-back gap-ups for the fourth time in thirty years. The SPY, also known as Spider, had previously seen such gap-ups on March 13, 2019, October 12, 2020, and March 31, 2023.
The S&P 500 had rallied up to 4,600 in late July before entering a range-bound territory over the past three months. During this time, the yield on the 10-year Treasury reached 5% for the first time in 16 years.
In September, the consumer price index (CPI) grew 0.4% sequentially and 3.7% year-over-year, coming in higher than economists’ estimates of 0.3% and 3.6%, respectively. However, the expectations of the U.S. economy experiencing a soft landing rose after the recently released jobs data that showed nonfarm payrolls rose less than analyst estimates.
Nonfarm payrolls rose 150,000 in October, coming in below the consensus forecast of 170,000. The rise in nonfarm payrolls was lower than September’s 297,000 gain. The unemployment rate also rose to 3.9%, the highest since January 2022.
The Fed left interest rates unchanged for the second time in a row following 11 consecutive rate hikes since March 2022, including four this year. The Fed has held the benchmark interest rates steady between…
Continue reading at STOCKNEWS.com
