Is this the end of Eldorado in the markets? What will the week bring?

A calm start to the new week on the markets allows investors to recover from Friday's sell-off on Wall Street. The S&P 500 index tested around 5000 points, creating the third red candle in a row on the weekly chart. The lack of further escalation in the Middle East supports the positive sentiment, but many investors are still wondering whether the bull market is over.

Is this the end of Eldorado in the markets?

Three weeks of dynamic declines in the valuation of Wall Street's main index is a sight we have become unaccustomed to. The last such deep decline in the S&P 500 took place in the second half of 2023, when the index lost over 10% from its then peak level. The increased risk aversion is to some extent responsible for, among others: situation in the Middle East. Nevertheless, the lack of escalation - at least temporarily - calmed the markets, which resulted in the stabilization of gold prices around USD 2400 per ounce.

The quarterly results of the largest American companies will certainly be of key importance for the continuation of the current bull market in indices. In the coming days, it will publish its financial reports, among others: General Motors, PepsiCo, Tesla (Tuesday), AT&T, Ford Motor, IBM, Meta (Wednesday) or Alphabet, Microsoft or Intel (Thursday). How the above-mentioned companies have performed in recent months is important, but forecasts for the near future may be more important. The failure to provide preliminary results was interpreted as a sign of possible weakness of Super Micro Computer Inc., which lost over 20% of its market valuation at the end of last week. The announcement of a similar move by Netflix meant that, despite optimistic quarterly data, the streaming platform's shares ended last week with a decline of approximately 12%.

In today's webinar:

• What is behind the stock market declines?
• The market has a liquidity problem?
• Clothing, gold, Kakao – will this boom continue?

About the host

Dr Przemysław Kwiecień - Chief economist X-Trade Brokers. Doctor of Economics at the University of Warsaw, graduate of the University of Warsaw and London Metropolitan University (MSc). Holder of the prestigious CFA certificate. He has been working for XTB since 2007, previously he gained experience as an advisor to the Minister of Finance, Mirosław Gronicki, and an economist at Bank Millennium. At XTB, he manages the Analysis Department.

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