Listen to the latest market mood for the S&P500.

Next week should be another quiet week as the Chinese Lunar New Year holidays means the Asia-Pacific session will be quieter. There is a distinct slow feel in the markets right now with US stocks reaching record highs, but stock volumes at high levels, and a lack of top tier data to add into the mix.

However, the base case for the US is that both the Federal Reserve and Washington are ready to step in and give monetary and fiscal support when needed. The Fed is keeping rates low, QE levels high, and it shrinks from even any hawkish thoughts, let alone rhetoric. At the same time, the US is vaccinating its population at a good rate and the expectations are that the easy monetary policy will support US stocks for the foreseeable future.

In this environment the majority view will be to ‘buy the dip’.

Therefore, expect S&P500 buyers from pullbacks lower to 3800.

Trade Risks:

  • The main risk to this trade is from any risk-off tones.
  • Any bad news about the vaccine roll out will weigh on stocks.