On Friday, which was the 21st of December, the S&P index witnessed a fall by more than 2 percent which therefore paved way to the fifth Levy flight event for the index in the current year.
Because of this the investors has shifted their attention of forward looking aspect from the first quarter of the fiscal year 2019 to more distant quarters of the future which are the third and fourth quarter of 2019.
The Levy flight of the stock market of the United States had started on the 4th of December. This was because of the reaction of the investors to the United States Treasury yield curve’s partial inversion.
Apart from that the hawkish comment of the Fed President of the New York, John Willams which had promised hikes in the rate in the upcoming year was also responsible for the Levy flight.
This comment of the president of the New York has played a very big role in the sinking of the S&P index to its lowest point in the current fiscal year.
However, there were also contributions by the trade adviser of the president of the United States, Peter Navarro according to the Selling Alpha.
The week’s major economy as well as the market was divided into six positives along with seven negatives.
There was a fall in the price of oil of the United States below $50 because of the fears of oversupply.
Moreover, the president of the United States had again blasted on the Federal for reconsidering the rate hikes.
Because of these, the S&P 500 index had hit its 14 month low because of the jitters related to economy.
Apart from that there were slides in the equity as there were heightened worries because of the slowdown in the growth.
All of this contributed to that fall in the S&P 500 index.
Source: Selling Alpha, Reuters
