Unlocking SPDR S&P 500 ETF Trust's PotentialAt the start of 2023, our key assumption was that bullish trends would dominate the market this year despite the challenging global macroeconomic conditions following the post-COVID-19 era. Our prediction proved accurate, as the SPDR S&P 500 ETF Trust has already surged by over 10%, despite the ongoing high hydrocarbon prices.
Bears have been trying to regain control and putting downward pressure on SPY in recent weeks. Adding fuel to the fire was the news that the Federal Reserve is ready to raise interest rates again if necessary, Jerome Powell said following the meeting at the end of September.
"Given how far we have come, we are in a position to proceed carefully as we assess the incoming data and the evolving outlook and risks. Real interest rates now are well above mainstream estimates of the neutral policy rate, but we are mindful of the inherent uncertainties in precisely gauging the stance of policy. We are prepared to raise rates further if appropriate, and we intend to hold policy at a restrictive level until we are confident that inflation is moving down sustainably toward our objective. In determining the extent of additional policy firming that may be appropriate to return inflation to 2 percent over time, the Committee will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments."
However, despite the negativity spreading in the media, in our opinion, all movements are taking place within the framework of corrective wave 4, which will be completed this week.
Overall, we believe that the Fed will not tighten its monetary policy as American savings continue to decline, which, given the rise in household debt, poses a significant threat to the stability of the US financial system.
In conclusion, we would like to note that we are optimistic about the American economy, which is showing its stability while China cannot recover from the COVID-19 pandemic. As a result, we expect that the price of SPDR S&P 500 ETF Trust will continue its movement within the impulse wave 5 up to $461-462.
Analyst’s Disclosure:
This article may not take into account all the risks and catalysts for the assets described in it. Any part of this analytical article is provided for informational purposes only, does not constitute an individual investment recommendation, investment idea, advice, offer to buy or sell securities, or other financial instruments. The completeness and accuracy of the information in the analytical article are not guaranteed. If any fundamental criteria or events change in the future, I do not assume any obligation to update this article.
