November is shaping up to be a bad month for the stock market. Really bad.
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Only halfway through the month, the U.S. market is on pace for its worst performance in a November since the 2008 financial crisis. The benchmark S&P 500 index has already fallen 4% this month, dragged lower by declines in mega-cap technology stocks such as Nvidia (NVDA) and Meta Platforms (META).
More worrisome, the S&P 500 just closed below its 50-day moving average, a key performance indicator, for the first time since April of this year. Analysts say that’s a sign that market weakness is likely to continue and even worsen in coming weeks.
Wall Street’s Fear Gauge
In a sign that investors are growing more skittish and risk-averse, Wall Street’s fear gauge, the Cboe Group’s (CBOE) VIX index, has risen 45% so far in November, reflecting the growing market volatility. The VIX index is now suggesting daily swings of around 105 points, or 1.6%, for the S&P 500 into year’s end.
Analysts say investors seem concerned about high stock valuations, a lack of economic data out of Washington, D.C., and that the U.S. Federal Reserve may pause its interest rate cuts. At the same time, closely followed investors such as Michael Burry and Peter Thiel are either dumping their shares of high-flying names such as Nvidia or shorting the stocks.
Is the SPDR S&P 500 ETF Trust a Buy?
The SPDR S&P 500 ETF Trust (SPY) currently has a Moderate Buy rating among 504 Wall Street analysts. That rating is based on 417 Buy, 79 Hold, and eight Sell recommendations issued in the last three months. The average SPY price target of $857.08 implies 29.85% upside from current levels.
