Altredo Analysts: U.S. stock market review and VIX peak on the threshold of 2020. Altredo customer reviews.
Rising commodity prices could create problems for Fed
US stock indices fell on Monday. As traders continued to rebalance their positions on the eve of the new year. The S & P 500 rose 2.5% on a monthly basis in anticipation of the last trading day of the year. It`s seems to be profit taking, which may continue in the first half of 2020. The VIX volatility index on Monday rose by 10.5%. For the first time in 2 weeks, it reached a 200-day moving average of 15. Expected home sales in the US were up 1.2% from the previous month. Not justifying the median forecast.
Most of the sector in the S & P 500 was lower. What was due to communications and healthcare. Utilities broke the trend. In December, most sectors grew, which was caused by the growth of shares in the energy sector. Which may rise by 9.75% per month, while real estate has changed the trend and decreased by about 0.25% since the beginning of the month.
Volatility is growing
VIX Volatility Index spent the second half of December in the red. As stocks rose to record highs, but complacency settled. Over the past two trading sessions, VIX has fallen in price, up almost 11% on Monday. And he tested key resistance levels near the 200-day moving average of about 15. A break above this level on VIX would probably coincide with a New Year sale.
Commodities May Create Problems for Fed
Raw material prices are rising, supporting energy and mineral reserves. Crude oil prices were raised by a combination of supply shortages and a falling dollar. Productivity in the US was declining compared with profitability in Europe, which affected the dollar. If the dollar continues to fall, and inflation of intermediate goods increases as well. As wages rise, the Fed may be able to raise rates. Raising rates during the election year becomes difficult for the central bank. The Fed has already faced strong pressure from President Donald Trump. And there is a chance that the Fed and the market will be biased when the market starts to raise prices, while the Fed is sitting on the side, awaiting the results of the 2020 elections.
US home sales up
Expected home sales in the US rose 1.2%. Compared to the previous month, not meeting expectations. This reflects a market turn over last year’s weakness. Signing contracts jumped 5.6% since November 2018.
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