News & Analysis at your fingertips.

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
Subscribe
Please try again
EUR/USD
Mixed
Oil - US Crude
Bearish
Wall Street
Mixed
Gold
Bullish
GBP/USD
Mixed
USD/JPY
Mixed
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
More View more
Real Time News
  • Commodities Update: As of 11:00, these are your best and worst performers based on the London trading schedule: Oil - US Crude: -0.57% Gold: -0.85% Silver: -1.92% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/sqkI5pXajb
  • Forex Update: As of 11:00, these are your best and worst performers based on the London trading schedule: 🇳🇿NZD: 0.31% 🇨🇦CAD: 0.28% 🇬🇧GBP: 0.18% 🇯🇵JPY: 0.10% 🇨🇭CHF: 0.10% 🇦🇺AUD: -0.04% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/JtkOOLrtBz
  • Heads Up:🇧🇷 BCB Focus Market Readout due at 11:30 GMT (15min) https://www.dailyfx.com/economic-calendar#2020-11-30
  • Indices Update: As of 11:00, these are your best and worst performers based on the London trading schedule: Germany 30: 0.20% FTSE 100: 0.11% France 40: -0.39% US 500: -0.45% Wall Street: -0.60% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/Z8IqQDxEvC
  • Dividend investing is the practice of investing in dividend-paying stocks. Why should you invest in dividend stocks? Find out: https://t.co/v8jRlj0OvP https://t.co/84CzBgWQLg
  • Heads Up:💶 ECB President Lagarde Speech due at 10:30 GMT (15min) https://www.dailyfx.com/economic-calendar#2020-11-30
  • 🇮🇹 Inflation Rate YoY Prel (NOV) Actual: -0.2% Previous: -0.3% https://www.dailyfx.com/economic-calendar#2020-11-30
  • Heads Up:🇮🇹 Inflation Rate YoY Prel (NOV) due at 10:00 GMT (15min) Previous: -0.3% https://www.dailyfx.com/economic-calendar#2020-11-30
  • 🇬🇧 Mortgage Lending (OCT) Actual: £4.3B Expected: £4.455B Previous: £4.8B https://www.dailyfx.com/economic-calendar#2020-11-30
  • 🇬🇧 Mortgage Approvals (OCT) Actual: 97.5K Expected: 84.486K Previous: 91.5K https://www.dailyfx.com/economic-calendar#2020-11-30
S&P 500 Forecast: SPY ETF Sees Largest Outflow in 11 Months Ahead of Fed

S&P 500 Forecast: SPY ETF Sees Largest Outflow in 11 Months Ahead of Fed

2019-09-17 20:05:00
Peter Hanks, Analyst
Share:

S&P 500 Price Chart Forecast

S&P 500 Forecast: SPY ETF Sees Largest Outflow in 11 Months

Markets and investors alike are expressing apprehensiveness on Tuesday as time runs out until the highly anticipated September FOMC meeting on Wednesday. Largely responsible for much of the optimism surrounding the Index, dovish expectations have been heightened as the meeting approaches but not all are convinced the Fed can deliver as futures pricing suggests the market’s dovish convictions are slipping. At present, the odds of a 25 basis point cut stand narrowly above 50% - down from the nearly certain 99% just weeks ago. Consequently, the SPY ETF has seen drastic inflows and outflows in recent days as investors place their bets ahead of a decision with immense market-moving potential.

S&P 500 Price Chart & SPY ETF Flows

S&P 500 price chart forecast

Data source: Bloomberg

To that end, Monday saw investors pull over $6 billion out of the SPY ETF in the largest intraday outflow since October 2018 when over $6.6 billion fled elsewhere. To be sure, the fund has been dominated by a string of inflows throughout September as SPY racked up a total of $6 billion in net inflows during the period – assisted by Friday’s inflow of $5.5 billion which was the largest net inflow since January. Thus, an outflow of such magnitude given the proximity to the meeting could suggest a late change in attitude among investors that may hint more investors are becoming uncertain the Fed will be unable to meet the market’s expectations.

It is also possible the outflow was spurred, at least in part, by the attack on the Saudi Aramco facilities that sparked a crude oil price rally. Either way, the capital flows and deadlocked price action suggest the market is anything but certain heading into the September Fed meeting, which is somewhat concerning given that the VIX rests at a modest 14.5.

VIX Price Chart Overlaid with the SKEW Index

vix price chart and S&P 500 chart

Created with TradingView

With so much at stake and a depressed “fear gauge,” the potential for an outsized move is heightened. That potential is in turn reflected in an elevated SKEW Index. The Index attempts to calculate the possibility of a move outside one standard deviation and has crept to levels similar to that of late July – around the time of the previous FOMC meeting. With that in mind, waiting on the sidelines until the event has passed may prove to be a prudent play and that same strategy could be why the SPY ETF saw such a large outflow ahead of the Fed meeting tomorrow.

As the decision approaches, be sure to keep a watchful eye on the situation by following @PeterHanksFXon Twitter. Alternatively, the weekly equity webinar “Dow Jones and DAX 30 Levels to Watch Ahead of the Fed,” will precede Wednesday’s event. There we will talk technicals, commentary to look for alongside other equity markets.

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

Contact and follow Peter on Twitter @PeterHanksFX

Read more:Dow Jones, DAX 30, FTSE 100, S&P 500 Forecasts for the Week

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

DISCLOSURES