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S&P 500 Hits Lowest Levels Since November 2005, Bodes Ill for Carry Trades
Thursday, 11 September 2008 13:44:42 GMT  |  Terri Belkas, Currency Strategist
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The S&P 500 has fallen below the lowest closing levels since November 2005, and while 1,200 should serve as solid psychological support, the next key level will not really come into play until 1,175. Indeed, risk aversion is making a comeback in a big way, as indicated by the gains in the VIX Index. Overall, it's pretty clear that the US government's seizure of Fannie Mae and Freddie Mac has failed to shore up the market's confidence, which leaves risk-related trades - such as the JPY crosses and high-yielding currencies - at risk.

S&P 500 Index (Daily Chart)
sandp_091108_2
Source: Bloomberg


VIX Index (Daily Chart)
sandp_091108_1
Source: Bloomberg

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