Undoubtedly, the stock market’s bullish trend has garnered a lot of attention from investors worldwide. This upward trajectory seemingly has no limitations, leading to the constant question – when will this bullish momentum snap? To answer this properly, there are always the telltale charts that elucidate these conditions effectively.
First, we delve into the S&P 500 chart. According to the resource, the S&P 500 index has been demonstrating commendable performance. It maintained a steadfast ascend, showing no signs of slowing down. This result was achieved despite the market uncertainty engendered by the ongoing pandemic and political turmoil worldwide. The index has seen approximately 10% growth since the beginning of the year, leading many to ponder if this success is sustainable.
Looking at the 10-year Treasury Inflation-Protected Securities (TIPS) yield, it’s apparent that a negative correlation exists between this yield and the S&P 500 chart performance. This inverse relationship speaks volumes about the bullish tread. When there’s a rise in the 10-year TIPS yield, it’s often an indication that the S&P 500 performance might face a stumbling block. The link provides a chart that shows the TIPS yield beginning to steadily increase from the start of the year, indicating potential uncertainty for the S&P 500 performance down the line.
Another chart to observe is the Federal Funds rate, which has remained low and unchanged. The lower interest rates, initiated by the Federal Reserve as a measure to combat economic downfall due to the pandemic, have proven crucial for the stock market’s bullish trend. The low rates essentially pump more liquidity into the market, thereby encouraging investors and companies to take up more debt and thus instigating more investment – paving the way for an upward spiral.
Sometimes a view into the global platform sheds light on the overall market scenario. The charts show that Shanghai Composite, Taiwan’s Taiex and South Korea’s Kospi have maintained a steady rhythm. There’s no drastic fluctuation, just moderate rises and falls. Importantly, they have not registered any unprecedented drop, thereby not triggering any alarm bells.
With an eye on corporate earnings, a significant factor driving the stock market’s bullish trend, Apple, a leading player in the S&P 500 index, is a company to watch. It has shown promising performance, leading the bullish bandwagon. The uptrend in Apple’s performance has aligned with the S&P 500’s progress, suggesting its influence over the market’s overall trend.
In conclusion, bearish trend signals are yet very moderate. The questions about a potential downturn are inevitable. However, the markets, as the charts have suggested, currently don’t show any such evidence of a ‘snap.’ As long as the factors, such as low Federal Funds rate and steady corporate earnings, continue to persuade, the bullish trend of the market is likely to persist until a significant trigger flips it otherwise.