S&P 500 Snapshot: Index Drops Into Correction Territory

The S&P 500 dropped into correction territory as it has now fallen at least 10% from its recent high. The index is currently up 7.67% year to date and is 14.16% below its record close from January 3, 2022.

Here is a snapshot of the index over the past 5 days:

S&P 500 Weekly view

Here is a snapshot of the index from the past six months:

S&P 500 Last 6 Months

The U.S. Treasury put the closing yield on the 10-year note, as of October 27th, at 4.84% which is above its record low (0.52% on 8/4/2020). The 2-year note is at 4.99%. ETFs associated with Treasuries include: iShares 1-3 Year Treasury Bond ETF (SHY)iShares 7-10 Year Treasury Bond ETF (IEF), and iShares 20+ Year Treasury Bond ETF (TLT). See our latest Treasury Snapshot here.

S&P 500: A Perspective on Drawdowns

On October 9, 2007 the S&P 500 reached a then all-time high, closing the day at 1565.15. Then on March 9, 2009, the index dropped ~57% off of its high from exactly 17 months before, closing the day at 676.53. This time period became known as the Global Financial Crisis. It took over 5 years before the index reached a new then all-time high on March 28, 2013, where it closed out at 1569.19. The chart below is a snapshot of record highs and selloffs since the 2007 peak reached on October 9, 2007.

S&P 500 Drawdowns

What happens if we take out the Global Financial Crisis? Here’s a snapshot the same chart above where the start date has been changed to the trough reached on March 9, 2009. Note the recent selloffs in 2022.

S&P 500 Drawdowns

Here’s a table with the number of days of a 1% or greater change in either direction and the number of days of corrections (down 10% or more from the record high) going back to 2013.

Here is a linear chart of the index since October 9, 2007:

S&P 500 MAs

Here is a linearly scaled version of the same chart with the 50- and 200-day moving averages. Starting on August 16th, the index dropped below its 50-day moving average for the first time since the end of March.

S&P 500 MAs

S&P 500: A Perspective on Volatility

For a sense of the correlation between the closing price and intraday volatility, the chart below overlays the S&P 500 since 2007 with the intraday price range. I’ve also included a 20-day moving average to identify trends in volatility.

S&P 500 versus S&P Equal Weight

How does the S&P 500 match up against the S&P Equal Weight Index this year? The S&P 500 is currently up 7.67% while the S&P Equal Weight is down 5.34%.

S&P 500 MAs

ETFs associated with the S&P 500 include: iShares Core S&P 500 ETF (IVV)SPDR S&P 500 ETF Trust (SPY)Vanguard S&P 500 ETF (VOO)SPDR Portfolio S&P 500 ETF (SPLG), and Invesco S&P 500® Equal Weight ETF (RSP).

For more news, information, and analysis, visit the Fixed Income Channel.