Can the S&P 500 break 2000?

After a dismal start to the month, the S&P 500 (CME:SPU14) rallied to a record high last week and is nearing an important psychological resistance zone around 2,000.
If the index manages to break through this level, it should bode well for U.S. stocks in the near-term. The strong performance of U.S. stocks over the last couple of weeks can be attributed to easing geopolitical tensions, a strong earnings season and encouraging US economic data, which helped the market brush off mildly hawkish minutes from the Fed last week.

On the data front, the optimism surrounding the U.S. labour market has been bolstered by strong U.S. housing and manufacturing data. It’s worth pointing out that while the economic data out of the US has been broadly positive lately, it hasn’t materially changed the market’s perception on when the Fed will begin hiking interest rates. Thus, it’s supportive for U.S. equity markets.

In the QE era, strong U.S. economic figures can result in a negative reaction from U.S. stocks because it makes the market jittery about the prospect of higher rates. This time is different because the market’s expectations for monetary policy haven’t really been altered, despite the general feeling from the Fed’s July policy minutes that the doves are moving closer to becoming the minority.

Source:, Bloomberg (Note: This chart may not represent prices offered by

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