Jump to content

S&P 500 Forecasts for the Week Ahead


Recommended Posts

S&P 500 Analysis and News

  • S&P 500 | Hawkish Fed Trade Exhausted
  • Heading Into Most Exciting Bank of Japan Meeting in Years
  • Russian Roulette: Geopolitical Tensions Rising
  • Potential Headwinds From OPEX

S&P 500 Index Today | SPX Chart and Forecasts

S&P 500 | Hawkish Fed Trade Exhausted

After the initial pressure stemming from an ever more hawkish Fed with quantitative tightening back in the frame. The hawkish Fed trade looks to be roughly priced in, with a March hike the consensus view, alongside balance sheet normalisation soon after lift-off, circa late Q2/early Q3. In turn, the USD has struggled while US yields failed to extend higher, instead, new risks are beginning to grab traders focus.

Heading Into Most Exciting Bank of Japan Meeting in Years

Firstly, there has been increased coverage over a change in direction for Bank of Japan monetary policy, making next week’s decision perhaps the most exciting in years. After last week’s report that the BoJ will adjust its view of inflation risks for the first time since 2014. Yesterday, Reuters sources noted that BoJ policymakers are debating how soon they can start telegraphing an eventual rate hike, which could come before hitting their 2% target. Now while the report acknowledges that a hike is no where near imminent, what it does signal is a readiness to step back from its ultra-loose monetary policy, which is particularly notable given that the BoJ is the most dovishly priced central bank. As such, speculation will likely keep JPY firm in the lead up to next week’s meeting.

Russian Roulette: Geopolitical Tensions Rising

Elsewhere, geopolitical risks are picking up as NATO-Russia talks ended with no resolution on Ukraine. With the US noting that the drumbeat of war is sounding loud and Russia threatening military deployment, the Russian Rouble has felt the brunt of this recent escalation, posting its largest daily loss since March 2020. Meanwhile, Russian credit spreads have begun to widen. Should tensions escalate, flight to safety flows would likely prompt a sizeable bid in havens such as the Japanese Yen and USTs, in which the latter has the propensity to squeeze higher, given the crowded short position.

Russian Rouble Daily Performance vs USD

S&P 500 Forecasts for the Week Ahead

Source: Refinitiv

Potential Headwinds From OPEX

As a reminder, next week is OpEx, an event where most stock options expire, which in the past 12 months have become increasingly looked at given that throughout 2021, the third week of most months saw the S&P 500 on the back foot. As shown in the chart below, the cumulative performance of the S&P 500 in the third week of the month throughout 2021 was -5.8%.

S&P 500 Forecasts for the Week Ahead

Source: Refinitiv, DailyFX

image.png

RESOURCES FOR TRADERS

Whether you are a new or experienced trader, we have several resources available to help you; indicator for tracking trader sentiment, quarterly trading forecasts, analytical and educational webinars held daily, trading guides to help you improve trading performance, and one specifically for those who are new to forex.

 

Jan 14, 2022 |  Justin McQueen, Strategist. DailyFX

Link to comment

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • image.png

  • Posts

    • Demo account: Please note that conditions on demo accounts may differ from real accounts. Some brokers may only provide overnight loans on real accounts and not on demo accounts.
    • Swap Rate: Check the swap rates for your open positions. Overnight loans are calculated based on the difference between the interest rates of a currency pair, and if the difference is small or negative, you will not receive a loan.
    • Civic (CVC) emerges as a game-changer in the realm of identity verification, offering a secure and decentralized solution for payment verification between "Identity Verifiers" and "Identity Requesters" within the Civic ecosystem. With its innovative approach and recent developments, Civic is making waves in the cryptocurrency market Payment Verification: Civic's primary use case lies in facilitating payment verification between parties within the Civic ecosystem. By leveraging blockchain technology, Civic provides a secure and transparent method for verifying identities and ensuring trust in transactions.  Integration with Solana Token Extensions: Civic's recent announcement on X revealed that Civic Pass is now integrated with Solana Token Extensions, further enhancing its utility and interoperability within the blockchain ecosystem. This integration opens up new possibilities for Civic's application and adoption.  Civic (CVC) is now listed on Bitget  and other CEX providing users with convenient access to trade and engage with the token. This listing further enhances Civic's visibility and liquidity, attracting new users and investors to the ecosystem. 
×
×
  • Create New...
us