The SPDR S&P 500 ETF Trust (NYSE: SPY (NYSE:SPY)) snapped its winning streak last week and kicked off Monday with another day of steep losses.
DataTrek Research co-founder Nicholas Colas discussed three reasons why the summer stock market rally has run out of steam despite four consecutive weeks of gains.
Given these three troubling trends and uncertainty surrounding the upcoming Jackson Hole Summit later this week, investors should expect the VIX volatility index and Barclays (LON:BARC) iPath Series B S&P 500 VIX Short-Term Futures ETN (BATS: VXX) to remain elevated for now, Colas explained.
"We continue to believe the VIX should, and will, trade in a band from 20-28 and we would use the upper end of that range as a place to add equity exposure," Colas said.
See Also: S&P 500 Snaps 4-Week Winning Streak As Investors Anticipate Higher Interest Rates
Benzinga's Take: The S&P 500 went on quite a run in late July after the latest batch of economic data indicated inflation may have finally peaked. However, just because inflation may have peaked doesn't mean the Fed is going to stop aggressively tightening to get it back closer to its 2% target, a message investors will likely hear loud and clear from Fed Chair Jerome Powell during his speech at Jackson Hole
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