Worst Monthly Loss of the Year.
The S&P 500, a benchmark for the broader U.S. economy, has been on a roller-coaster ride this year. After four consecutive weeks of decline, the index recorded its most significant monthly loss of the year. Closing September with a 4.93% decrease, following a 1.71% drop in August, the S&P 500 appears to be in a downward spiral. Despite these setbacks, the index is still up by 12.13% year-to-date, albeit 10.60% below its record close from January 3, 2022.
A Snapshot of the S&P 500’s Performance
To provide a clearer perspective of the S&P 500’s performance, let’s glance at its trajectory over the past six months and the last five days in September. Meanwhile, the U.S. Treasury ended September 29th with a closing yield of 4.59% on the 10-year note, significantly higher than its record low of 0.52% on August 4, 2020. The 2-year note stands at 5.03%.
A Glimpse at the S&P 500’s Drawdowns
The S&P 500 has a history of dramatic highs and lows. On October 9, 2007, the index hit an all-time high, closing at 1565.15. Fast forward to March 9, 2009, and the index had plummeted by about 57%, closing at 676.53 – a period now infamously known as the Global Financial Crisis. It took over five years for the index to climb back and breach a new all-time high on March 28, 2013, closing at 1569.19.
A Closer Look at the Index’s Peaks and Troughs
The chart below provides a snapshot of the S&P 500’s record highs and selloffs since its peak on October 9, 2007. If we exclude the Global Financial Crisis and start from the trough reached on March 9, 2009, we can observe the recent selloffs in 2022. The table further details the number of days the index changed by 1% or more in either direction and the number of correction days (down 10% or more from the record high) dating back to 2013.
Understanding the S&P 500’s Volatility
Let’s overlay the S&P 500 since 2007 with the intraday price range to comprehend the correlation between the closing price and intraday volatility. Adding a 20-day moving average helps identify trends in volatility. Some of the ETFs associated with the S&P 500 include the iShares Core S&P 500 ETF (IVV), SPDR S&P 500 ETF Trust (SPY), Vanguard S&P 500 ETF (VOO), and SPDR Portfolio S&P 500 ETF (SPLG).
Navigating the Intricacies of the Financial World
Understanding the dynamics of the S&P 500 and the broader financial market can be complex. Feel free to contact GSB Capital if you seek further insight into these trends or need assistance interpreting the data. Our team of experts is here to help you navigate the intricate world of finance.
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