Thursday has shown us sturdy results for the S&P 500. The index experienced a turn around and shifted to positive for the week, following its biggest one-day drop for the year which occurred on Monday. One factor that drove the market is the possibility of a trade and currency clash occurring between Beijing and Washington. This brought enough tension to investors to trigger participants into purchasing beaten-down stocks. As a result, the S&P experienced an increase of approximately 54 points or 1.9% and finished close to 2,938 guided by results from the energy sector. This takes the index up 0.2% for the week. 

A simple interpretation in the remarkable recuperation of equities could be due to a few market participants who mentioned a hard plunge in the U.S. Treasury yields that caused stocks to be a respective bargain. Meanwhile, some indicated that the market disturbance was greater due to the Federal Reserve’s easing and others suggested that the 6.5% decline within six days across Monday merely proceeded too much too fast.

No matter, the stimulus, a glance at the history of the large shifts which have distinguished past August trading typically occur in masses till now. The last time the index took back a decline of no less than 2% in a day, it signaled the end of a crush in December 2018, which almost concluded the year's bull market. During February of the same year, one day of delight brought anguish for the index that continued for an extra two months.

According to Bloomberg, Michael O’Rourke, the chief market strategist at JonesTrading, stated before a phone that pursuing the price action is an extremely risky way of perceiving markets. He further commented that his kind of trading is commonly discerned in a setting that is exceedingly volatile and can be burned easily

Stocks began lower in the day as market participants felt uneasiness regarding the global economy being on the brink of a recession. This was after unforseen moderation of central banks in  New Zealand, Thailand and India. 

Also, according to Bloomberg, the chief investment officer at Bryn Mawr Trust Co., Ernie Cecilia, stated that they are hesitant to declare that the worst is over. He further stated that we are behind, currently at the 11th year of the economic course and the growth of the economy is not level. There is no doubt that the bond market believes that the Fed is mistaken.

By: Cyril Latrice Cajanding