THE SUMMARY – THE WHAT
The S&P 500 index tumbled at the opening of the holiday-shortened week (markets were closed on Monday for Memorial Day)the in the wake of several news headlines reeling the global markets, including Italy’s political drama that threatened a European debt crisis. The index fell sharply below its 100 DMA during Tuesday’s session, registering the day’s low just 3 points above the 50 DMA. However, the choppy week ended with a moderate gain of 0.49% as investors turned their focus back to strong economic data and better-than-expected earnings reported by companies across sectors throughout the week.
Despite all the choppiness caused by political uncertainties and trade war concerns, the index still remains in an indecisive state and confined within the 2675 and 2740 range. The strengthening of economy suggested by strong economic data released this week along with the ongoing solid earnings season continues to provide support. Investors cheered a solid jobs report on Friday.
The Wall Street’s ‘fear index’, CBOE Volatility Index (VIX) rose dramatically by 28.74%, settling at 17.02 amid Monday’s global equity sell-off, registering the largest one-day gain since February 5. It fell back to 13.46 by the end of the week as anxiety around European debt crisis eased after Italy chose to form a populist government after months of political drama.