S&P500
The US market is up and at its historic highs. As of November 2, according to the S&P500 index, the US market has gained from 3,750 to 4,600 points, or 22.7%, since the start of the year. For the US market this is a multi-year record result. This, on the one hand, indicates a high level of optimism in the market at the moment and a strong economy. But it is also a warning signal to investors that it is not wise to start strategic buying at current price levels. Only buy at the next strong market pullback, a correction.
Last week the market saw the US GDP report for Q3. GDP grew by 2%, below forecasts. This is a logical decline after several quarters of recovering growth, as the economy has gone from a sharp downturn in the midst of the coronavirus crisis to its normal state. At the end of the week a report showed inflation at 3.6%. Since April, inflation has been well above the Fed's target. On November 3, the Federal Reserve will state its stance on inflation.
The Dow was trading in the range of 35,770 - 35,915. It added 145 points or 0.5%. The NASDAQ stayed in the 15,240 - 15,600 range. The index rose 360 points or 2.4%.
The SP500 was in the 4,550 - 4,610 range and gained 60 points or 1.3%.
The Dow is expected to be in the 35,600 - 36,100 range, the NASDAQ will stay in the 15,500 - 15,650 range, and the S&P500 is likely to remain in the range of 4,570 - 4,650.
A tightening of Fed policy is expected in the long term. A rate hike in the fight against inflation is inevitable. A slowdown in the US economy and the resulting large correction in the stock market is also inevitable. It is only a matter of time and the levels that the market will be able to reach before the fall.
