With earnings season in full swing, the markets maintained their bullish stance last week. The US...
Up, Up but how far away?
The U.S. markets were up last week, reaching record highs in response to robust corporate earnings.
The S&P500 ended the week up at 4,544.90, the DOW at 35,677.02, and the Nasdaq at 15,090.20
As of last week, 117 S&P 500 companies have reported actual results for Q3 2021. Of these, 83.8% have reported earnings above analyst estimates.
Investor sentiment is positive, pushing the Volatility Index (VIX) to its lowest level since March 2020. The VIX is used to measure the level of risk, fear, or stress in the market when making investment decisions.
Hopes for additional fiscal stimulus also contributed to positive investor sentiment. U.S. President Biden said that his party was close to striking a deal on the social infrastructure bill.
European equities were also up on global cues and strong corporate earnings. The Euro Stoxx index was up by 0.53%, but the UK FTSE and Germany's DAX were down by 0.41% and 0.28%
Evergrande's coupon payment on a 2.2Billion bond before the end of the grace period and assurances by Chinese officials to support the real estate sector calmed investor fears.
CSI 300 benchmark rose 0.6%, and the Shanghai Composite Index added 0.3% in response.
Indian markets ended the week lower despite positive global cues due to rising oil prices and profit booking. The Sensex was down by 0.79% to close at 60,821.62, and the Nifty was down by 1.22% to close at 18,114.90
Up, up but how far away?
While everything looks good and positive, the looming question is, How far can the markets go from here?
As the outlook remains bullish, investor complacency can set in quickly, exposing portfolios to high-risk assets.
I hope you found this market update useful.
Let me know your thoughts on this rally, and where do you think the S&P500 will be at the end of the year?
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