We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
EUR/USD
Mixed
Oil - US Crude
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Wall Street
Bearish
Gold
Bullish
GBP/USD
Mixed
USD/JPY
Mixed
More View more
Real Time News
  • A macro forex trading guide exploring how to trade the Euro vs the Swedish Krona and Norwegian Krone through the prism of the Core-Perimeter model. Get your market update from @ZabelinDimitri here:https://t.co/n6zwlZJmGO https://t.co/F8sLZvRG1q
  • If you missed today's session on IG Client Sentiment where I discussed the outlook for the #DowJones, $AUDUSD and $USDCAD while discussing fundamentals and technicals, check out the recording below and stay tuned for a full report! - https://t.co/2wVxhtItzX
  • Wall Street Futures Update: Dow Jones (+0.213%) S&P 500 (+0.175%) Nasdaq Composite (+0.242%) [delayed] -BBG
  • RT @margaretyjy: Watch my Bloomberg TV interview at 9:00AM Singapore time. Coming in soon! https://t.co/Z6u6offept
  • The Core-Perimeter trading model helps traders understand interactions between global economies, helping to trade the assets embedded in these relationships. Get your market update from @ZabelinDimitri here:https://t.co/dKRAo00lfA https://t.co/jw5uvZBvRx
  • Hello there, traders! It has come to my attention that there have been people pretending to be me on Twitter. If you see anyone doing so, please be sure to report them. My Twitter handle is @ZabelinDimitri. Any variation of that is an imposter. Please spread the word.
  • After approximately 100 votes, it seems that a narrow majority of participants to my poll believe Gold ($GC_F) is going to resolve its congestion with a break lower: https://t.co/NTwXu7ZaGF
  • 🇯🇵 Bank Lending YoY (JUN) Actual: 6.2% Expected: 7.2% Previous: 4.8% https://www.dailyfx.com/economic-calendar#2020-07-07
  • Heads Up:🇯🇵 Bank Lending YoY (JUN) due at 23:50 GMT (15min) Expected: 7.2% Previous: 4.8% https://www.dailyfx.com/economic-calendar#2020-07-07
  • The ASX 200 and AUD/JPY are at risk of losses as cases of Covid-19 continue to climb in Victoria, Australia’s second-most populous state. Get your #ASX market update from @DanielGMoss here: https://t.co/O0LNvhy4eY https://t.co/D0gLVmr3Oy
S&P 500, Dow Rout Allows Bold Investors to Pick up Cheap Shares

S&P 500, Dow Rout Allows Bold Investors to Pick up Cheap Shares

2018-10-26 21:57:00
Peter Hanks, Analyst
Share:

Talking Points:

  • Aggregated fund flows reveal a weekly net-inflow of $2.2 billion
  • Despite the continued sell-off, Wednesday saw the largest single day inflow in a month
  • Poor earnings weighed on equity sentiment and the QQQ ETF

What began as a few days of sustained losses for the S&P 500 now borders a full-scale correction with the index down just under 10% from its peak. With its close at 2,658 on Friday, the S&P 500 forfeited all year-to-date gains. Despite the continued sell-off, exchange traded funds that track the main indices realized net-inflows for the week.

S&P 500 Hourly Price Chart October 2018

S&P500 price chart equity drop

In total, the three ETFs saw $2.2 billion in inflows. While rather insignificant relative to their cumulative market capitalizations, the flows are noteworthy given the market’s climate. This week saw four of the five trading days close red with substantial losses on Wednesday and Friday. For the month of October, Thursday marked just the fourth green close. With that in mind, Thursday’s inflow of $4.1 billion is evidence that at least some investors remain optimistic.

Optimism in the equity market may be waning but opportunities to generate more are abound. This week in particular had key earnings in the second and third largest US corporations by market cap, Amazon and Microsoft. The reports presented an excellent opportunity to help stage a broader rebound if the results impressed. Further, this could have contributed to Thursday’s inflows if some investors bet strong earnings would mark the bottom of the dip. Unfortunately those who wagered on such a result were left out to dry with both the mega-cap tech companies missing forecasts.

Aggregate Fund Flows versus S&P 500 Performance

ETF fund flow chart

Join our analysts for Live Webinars as they cover the interesting trends materializing in global markets.

Still, earnings season presses on. Next week Apple is accompanied by Ford, General Motors, Daimler and Exxon. Investors will now look to these key earnings to help spur a rebound or at least create a floor for equities.

Another noteworthy earnings season development is the upcoming conclusion of the blackout period. Buyback “blackout periods” are enacted by firms to stall the repurchase of shares around earnings. Once they report earnings, the period is lifted shortly after and their repurchase plans can be carried out. Roughly one-third of companies listed on the S&P 500 reported earnings this week which means next week a substantial amount of capital will be able to enter the buy-side of the equity market.

In May, Apple alone announced a $100 billion share repurchase program. While the program can be carried out over a range of months, the recent sell-off has resulted in relatively cheap share prices which may prompt corporations to accelerate the rate at which they repurchase shares and provide buoyancy for the equity market. Apple is due to report earnings next week.

QQQ ETF Fund Flows and S&P 500 Price

QQQ etf fund flow chart

In contrast to IVV, SPY and VOO, the tech-tracking QQQ ETF saw outflows this week. While the net-flows totaled a minor $545 million, the flows suggest demand for tech seems to be waning. However, a trend would first need to materialize before such a conclusion could be asserted.

FANG price chart and S&P500

That being said, the precipitous decline witnessed in the FANG and semiconductor sector point to trouble for tech if only on the surface. The iShares PHLX Semiconductor ETF (SOXX) is a fund that tracks the largest domestic semiconductor manufacturers. At one point in the year, the semiconductor sector was one of the best performing but in a matter of days now finds itself a laggard versus the broader market baskets.

View our Economic Calendar for important data releases in the upcoming week.

Next week offers a litany of events on the economic calendar. Among them are rate decisions from the Bank of Japan and the Bank of England. GDP figures from Canada and Mexico are also scheduled and could provide some bullish momentum if they offer similar surprises to that of the United States Q3 GDP.

--Written by Peter Hanks, Junior Analyst for DailyFX.com

Contact and follow Peter on Twitter @PeterHanksFX

DailyFX forecasts on a variety of currencies such as the US Dollar or the Euro are available from the DailyFX Trading Guides page. If you’re looking to improve your trading approach, check out Traits of Successful Traders. And if you’re looking for an introductory primer to the Forex market, check out our New to FX Guide.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES

News & Analysis at your fingertips.