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S&P 500 retreats ~3% for the week, as traders come to grips with higher for longer Fed

Sep. 22, 2023 6:00 PM ETSPDR® S&P 500 ETF Trust (SPY) ETF, SP500XLU, XLE, XLV, XLB, XLF, XLI, XLK, XLP, XLY, XLRE, XLCBy: Anuron Mitra, SA News Editor24 Comments
manhattan office building

franckreporter/iStock via Getty Images

The S&P 500 (SP500) on Friday retreated 2.93% for the week to close at 4,320.00 points, posting losses in four out of five sessions. Its accompanying SPDR S&P 500 Trust ETF (NYSEARCA:SPY) slipped 2.92% for the week.

The benchmark index notched its worst weekly performance since

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Comments (24)

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With the national debt so high today it isn't the 1980's when they jacked rates to 20%-Volker. My thinking is rolling over the debt at these higher rates is killing the country as payments are approaching the "Defense Budget" and could exceed it and beyond. So....I figure they will have to lower them some or devalue massively by just printing money or cutting spending. Congressional shutdown is about all this because they have driven us right to the brink almost. If they choose money printing hard assets would do well like gold/silver, but if they have to lower some holders of fairly longer term bonds would see a nice rise. Check out the Debt Clock it's crazy what's going on.
FrankEllis profile picture
@D. Rockefeller
Only those who have not educated themselves are concerned about the "national debt." It is a label, not the same or even similar to personal, state, or municipal debt. Sovereign debt is merely a Treasury bookkeeping label. A sovereign nation can have no actual or real debt. A sovereign nation does not depend on taxes to pay debt. Any debt discussion by politicians is a key reminder that person should not be in an elected position because they fail to understand the concept of sovereign debt. Every investor on Seeking Alpha has the ability to educate themselves, to better understand the difference between the finances of a sovereign nation and the finances of every non-sovereign debtor. Those Congressional representatives merely demonstrate their lack of ability to meet the minimum requirements of their elected position.
SPY 422-425 is the bottoming of wave 4 then 480 for wave 5. Buy calls
Ra's al Ghul profile picture
The U.S. could be in a recession and we just don’t know it yet www.marketwatch.com/...
FrankEllis profile picture
@Ra's al Ghul
Until unemployment increases sufficiently to cause a large drop in demand for products, which in turn would result in layoffs of more employees who are unneeded because reduced demand needs less supply, there is no receding demand, no receding economic activity.
Capital Gains profile picture
20% more to go down on S & P.
Ra's al Ghul profile picture
@Ganancias de capital well see . .
Robert NYC profile picture
'Higher-forever' might be the next coming buzz phrase.

Pre the 5 QEs (yes the 5th was during covid) the yield carve was not 'normal' as compared to before 2007.

Should The Fed decide to de-leverage its balance sheet to below $4T (they probably will not because once you get hooked, you get addicted) the future yield curve will be higher than the 2009-2019 period. Possibly forever.

So, as you sit and beg for a Fed rate cut to get your equity portfolio value to increase, remember to not hold your breath.
FrankEllis profile picture
"The Fed chair highlighted that economic activity had been stronger than all expectations."

So why is Chicken Little worried about the sky falling? Why are the lemmings running off the cliff? Why are the sheep following the imaginary opinion that fantasies about what might happen, but has not yet happened, may never happen, is more important, has greater power over the stock market, than the ECONOMY?

In a rational world, the economy is the stock market. In this dissociated world, rumors of what might happen sometime in the future maybe is embraced by the short-sighted who imagine fear and make believe it is reality. Occurring now is normal and to be expected volatility in the seasonally weak months of September and October, which should be a time of opportunity, accumulation, and expectation. Just beyond this tiny blip in the twenty-year secular Bull cycle is the resumption of the trend which is our friend. Those who are running for the exits will hold tightly to their fear, merely exchanging fear of loss for fear of missing out instead of embracing this time to buy and accumulate share count. Worriers always find something to worry about. Those of a positive state of mind always find better than expected outcomes.
khlim115 profile picture
@FrankEllis I am in your camp but with the gov shut down looming and UAW strike continuing, we are likely to see SPY at 4200 before going up.
FrankEllis profile picture
All things are possible. There are multiple potential support levels before we could reach 4200. And there again, the gov shut down has no real or direct effect on the corporations of the nation. If is in the imaginations of the market participants, but not in the reality of corporations continuing to make and supply what is demanded by consumers. Why is the recognition of insane politicians not in the awareness of the voters to the same extent as in the imaginings of market participants since they are presumably the same.

Economic activity is unlikely to falter. People will not stop buying food or paying for shelter, or traveling and partying or going to sports and entertainment events because a gov shut down happens. The economic activity of the majority of the population will be unaffected by the shut down and the rampant strikes. In fact, strikes will only occur when the economy is booming, and unemployment is very low. However, because market participants are less than rational, do not pause to consider that news does not affect the everyday running and profits of corporate America, your 4200 may happen. The lemmings and sheep follow the financial media rather than common sense because fear is the most highly developed response of the herd. Due to their backward way of thinking, 4200 or any approach toward is a buying and accumulating opportunity, a means of buying the same unaffected companies at a lower purchase price. The corporations, the economic activity, is stronger than the herd expects, is unchanged by media's program of driving prices down so that big money can accumulate more shares at lower prices. Ride the coattails of big money and accumulate more shares during the fire sale.
@FrankEllis Because it's easier to give your assets away than to really think things through. That's why 38% of the market is owned by 1% of people.
500MPH profile picture
Just the beginning…
Ramon_13 profile picture
Where is Amos Tuck when we need him ?
Meanwhile the uninformed and uninvested ride this snowball to hell.
Dale Roberts profile picture
Now investors are believing that rates are higher for longer.

Rates high, stocks not so much.
BasedCapitalist profile picture
"Higher for longer" was a well orchestrated psyop ordered by the banking cartels and executed with perfection by the state media. As soon as they've squeezed you out of as much as possible everything will be allowed to run up again. Expect a return to optimism soon.
Diesel profile picture
If we drop to 4200 or below, this will create a nice buying opportunity.
500MPH profile picture
You’ll do better below 3800
Rather get 10% from my oil stocks for the 12-14 months. With Biden sleepwalking, the Democrats will keep spending and real estate will stay empty.
@Ringo338 yep loos like energy is the trade
@yoloking1000 till its not anyway
@Ringo338 I made $520k from the futures signals, ..Investing with the right sources pays a lot.

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