The S&P 500 Index (.SPX) fell 0.35% from 1465.42 to 1460.15 over the course of last week amid concerns that turmoil in the euro zone will continue to negatively affect global economic growth. The CBOE Volatility Index (.VIX), which measures volatility in the stock market and is generally considered to be the most accurate indicator of investor fear, traded above 14. The FTSE Eurotop 300 Index traded as high as 1,121.35 and as low as 1105.66 before finishing relatively flat at 1119.32 for a loss of 0.08%. The down trading over the week came as Mario Draghi and the ECB's bond buying plan failed to lift German business confidence and sentiment dropped for a fifth straight month. Spanish Prime Minister Mariano Rajoy's administration will present its budget to parliament this Thursday and bank audit results on Friday. Additionally, Moody's will be issuing a new credit rating on Spanish debt in the coming days that could affect investor sentiment even further.
The currency markets experienced volatility this week as the euro lost more against the dollar than during any other period over the last two months. Although the Federal Reserve's plans to expand the money supply and the ECB's bond buying program has seen the euro recover to heights of ~$1.31 against the dollar over the past few days, EUR/USD was trading back in the $1.28-$1.29 range by Monday, September 24.
Commodities news was dominated by oil prices plummeting. In a three day stretch last week, crude oil prices fell by more than 7%. A large sell order placed by a market mover on Monday triggered stop-losses and prices subsequently continued to decline. Winter months typically cause oil prices to become bearish and hibernate, but depending on how certain diplomatic tensions between key oil producers in the Middle East work out over the coming months, we could see a supply squeeze and a rebound of oil prices.
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Nicholas Hurst
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