What’s Fueling the Market Rebound? $SPX $VIX $VVIX

Twelve_E
08-21

Artificial intelligence's impact on the market has been exaggerated. The yen carry trade has mostly resolved, and US consumer spending remains strong, contrary to earlier fears.

Despite a recent market dip, the $S&P 500(.SPX)$ has rebounded, nearing its July peak. Now the index, having recovered all its losses from earlier this month, sits just less than 2% away from the all-time peak it reached in July.

The AI sector, particularly Nvidia, has seen significant gains, suggesting a tech rebound. The unwinding of the yen carry trade is considered over, and investors are re-engaging.

US retail spending data has exceeded expectations, easing concerns about a consumer slowdown. The $Cboe Volatility Index(VIX)$ has dropped significantly since August, suggesting reduced market fear. However, the " $VIX Volatility Index(VVIX)$ " index, which tracks VIX derivatives, remains above average, indicating lingering uncertainty.

Federal Reserve Chairman Jerome Powell's upcoming speech at the Jackson Hole Economic Symposium could influence market volatility. While a rate cut is expected next month, the extent of the cut and its impact on the markets remain to be seen.

Photo of Federal Reserve Chairman Jerome PowellPhoto of Federal Reserve Chairman Jerome Powell

Take Profit as S&P Hits 5800 or Hold Till 6000?
As the stock market hits record highs more than 40 times this year, there are concerns that history might repeat itself and another financial crisis could occur. ---------------- Will S&P 500 hit 6000 by year-end as institutions predict? Would you take profit and stay cautious ahead or hold till the year-end?
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