Up until August, this year had been fairly dull as the S&P 500 was in a trading range somewhere between 1250 and 1350. July ended near the upper end of that range and by August 2nd we were once again testing the lower 1250 level. Over the following week the S&P 500 plunged roughly 150 points to hit 1101 on August 8th before rallying. The selloff was due to a slew of negative economic releases which led to lowered economic growth expectations as well as renewed concerns over European sovereign debt markets and banks.
Since August 8th the S&P 500 rallied just under 10% before selling off once more. The S&P 500’s trading range is now between 1205 and 1120, and unfortunately I think we may have another repeat in which negative economic releases and continued worries over Europe may see the current trading range broken to the downside with the markets erasing all of QE2’s rally from 2010.
What really spooked the markets this past month were the Michigan Consumer Sentiment’s plunge, the early release of Q2 GDP, and the Philadelphia Fed Survey, all of which showed declines and were well below the consensus forecast. Other regional Fed manufacturing surveys like the New York Empire Index and the Richmond Fed’s Manufacturing Index data for August also showed contractions and sent the markets lower.
Outside of a few reports this month most of the data released was for July, which saw a bounce in economic activity. The big concern going forward is what these reports will show for August as it appears economic activity has stalled. Over the course of the next two weeks we will be treated to several big economic releases and only one of them is for June and one for July, with the bulk of the releases showing August data...
Full article:
http://www.financialsense.com/contri...ntil-september
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