Last week’s trading session saw the S&P 500 eke out a small gain, climbing 1.8% to post its fourth winning week in the last five. Can the S&P 500 keep up the momentum and hit a new high before year’s end?
“The recommendation of Oxford University which is going to come into play if you listen to Dr Fauci is that we did not have to have large parts of the economy close down,” said Crossbridge Capital CIO Manish Singh, in an Economic Times article. “So these things are really adding to the positive swing to the market and the key thing for S&P to have a new high which it will have later this year is going to be when the economies have opened up and we have really seen a measured increase in earnings and GDP and the money that the government has been pouring into the economy or into the pockets of people through payment protection plan.”
“Those are going to show up in consumption numbers, so one cannot be bearish,” Singh added. “The only reason I am cautious is that I think that it might be sideways movement maybe for a month, two months or maybe a couple of weeks or few weeks but if you are talking end of the year, then definitely S&P is going to be higher from here and a new high in S&P is likely before the end of the year.”
Which Way Will the S&P 500 Go?
As the markets continue to flux with the uncertainty of the coronavirus, investors can utilize trading options for the S&P 500 that go in either direction, depending on your own confirmation bias. For bullishness, there’s the Direxion Daily S&P 500® Bull 3X Shares ETF (NYSEArca: SPXL).
SPXL daily investment results equating to 300% of the daily performance of the S&P 500® Index. The fund, under normal circumstances, invests at least 80% of its net assets (plus borrowing for investment purposes) in financial instruments, such as swap agreements, and securities of the index, ETFs) that track the index and other financial instruments that provide daily leveraged exposure to the index or ETFs that track the index.
The coronavirus could continue to put a bearish spin on major indexes like the S&P 500. As such, traders can look to the Direxion Daily S&P 500 Bear 3X ETF (NYSEArca: SPXS) for a leveraged inverse play.
SPXS seeks daily investment results equal to 300 percent of the inverse of the daily performance of the S&P 500 Index. The fund, under normal circumstances, invests in swap agreements, futures contracts, short positions or other financial instruments that, in combination, provide inverse (opposite) or short leveraged exposure to the index equal to at least 80 percent of the fund’s net assets (plus borrowing for investment purposes).
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