S&P 500 Slides for the Week

S&P 500 Slides for the Week

Currencies

USD

The good news for the dollar is that it was able to reverse a lot of the losses which it capped in previous trading weeks. It made inroads into the pound and the euro. This was the case especially during the latter part of last week. However, the greenback did make some big losses versus the yen. All this showed that the demand for haven currencies has increased since the New Year. With the Fed and even Bank of Japan ready to cut stimulus further, the strength of the dollar and yen is no surprise.

EUR

The euro dropped the most in two months last week, as it seems that the European currency is overvalued. Traders decided to unwind their long positions in the currency. The EUR/USD pair dipped 1.2 percent last week to $1.3589. This is after hitting the $1.3893 level on December 27, the highest since October, 2011.

JPY

The yen reversed nine weeks of declines following Japanese Prime Minister Shinzo Abe on January 1 stating the nation’s economy is improving. This was taken as a positive sign according to traders. Among the biggest gains for the Japanese currency last week were capped versus the dollar and the euro. The fact is that the yen is still undervalued to a certain extent, so we still may see strength for the JPY once Monday’s trading takes off.

Stocks/Indices

The S&P 500 Index went much lower during last week’s trading session. This is after the leading U.S. index capped its biggest annual gain since 1997. The weakness during the previous week of trading was largely owed to the concern with the Fed putting an end to stimulus in the near future.

We saw leading tech stocks such as Apple slide last week, as there was higher volatility than usual.

The S&P 500 Index slid last week by 0.5 percent to 1,881.37. The Dow Jones Industrial Average dipped 8.42 points, or 0.1 percent, to 16,469.99.

Commodities

Crude Oil

Crude oil futures were hit very hard during last week’s trading session. Investors were simply not in the mood to take risks when it came to the black gold last week. All of this came amid a report that supplies of U.S. fuel slid. In fact, crude capped its biggest fall in 19 months last week. The commodity slipped 1.6 percent on Friday and 6.3 percent last week. It is important to take into account that the production of oil is higher in the U.S. and Libya. Moreover, figures show that the consumption is sliding, especially in the U.S. Therefore, crude prices may dip in the week ahead.

Gold

The price of gold rose to its highest level in two weeks on Friday. This came on higher demand for coins and bars. It seems that consumption and demand of the yellow metal is increasing among one of the biggest consumers China. Moreover, Turkey’s imports of the commodity increased by 64 percent in December. With prices relatively low in historical terms, a number of traders are taking advantage of the low price. It may be that prices will creep even higher in the coming days.

Wild Card

S&P 500

The S&P 500 was one of the biggest losers in the financial markets during last week’s trading session. Investors were simply not in the mood to take risks amid the shortened trading week. Therefore, you will want to be cautious while trading in the coming weeks or so in order to minimize potential losses. Despite the risks, the S&P 500 may make a bullish comeback as the week gets going.