As the Fed Looks to Normalise Watch out for S&P500 Selling
Many analysts are concerned that global stock markets are due a correction. The issue is, when will this happen? One of the most likely catalysts will be when the Federal Reserve decides to normalise interest rates. Will it be September? Will it be on rising inflation concerns? That is unclear, but the S&P500 is now approaching a fairly weak summer period. This means that it does seem unlikely that the S&P500 will keep gaining over the summer months.
Between July 22 and August 24 the S&P500 share price has lost in value 8 times over the last 15 years. The largest fall was in 2011 with a -12.45% loss. The biggest gain was in 2009 with a 7.49% profit. The average return has been 3.21%.
Key Trade Risks: If there is a return to COVID-19 lockdowns that could mean that the Fed are much slower to normalise their policy.
Giles Coghlan
