Tomahawk, WI 10/03/2013 (BasicsMedia) – SPDR S&P 500 ETF Trust (NYSEARCA:SPY) with a market capital of more than $150.7 billion is one of the largest Exchange Trust Funds around. Its price and yield performance is a close replica of what goes on at S&P 500 Index. This ETF tracks e movements of some 500 selected stocks. These are stocks which are found in more than 24 different industries. They range from utilities, to telecommunication services, to health care and energy to mention but a few. We are now hearing that SPY could fall as low as 800. Is this true or even possible?

 SPY Affected A Lot During October

 Every year in October and the fourth quarter of any financial year, a lot of changes take pace which impact on SPY and other stocks. There are often a number of surprises which are thrown about during this period but now that the stock market has already made several string gains, one really wonders whether SPY will be affected as it has been in the past at a time such as this. But strange things could still happen since the market is replete with a lot of uncertainties some of which appear to come from nowhere. One such factor is the debt ceiling whose deadline is today.

 Analysts and investors are quite bullish about SPY’s performance in 2013. This is despite the warning by some investors that the stock market would probably never experience the level of growth that it did in the years prior to the last 17 years. However, the fact that this is the time of the year when firms report their third quarter financial results, could also affect the performance of SPY. The tapering by the Fed as well as the upcoming Black Friday and a critical holiday shopping period we are about to go into, will also affect SPY’s performance tremendously.

 Stocks Monitored by SPY

 Since SPY monitors the performance of a number of stocks from varied industries, it offers the best chance of finding out whether the economy is doing well or not. The evidence thus far appears to show that the economy is doing averagely, but not spectacularly well. It is also the best tool to determine whether the health of corporate America is fine or not. Thus far, the latter is not doing as well as might be expected. Consequently, this will have a bearing on the stock, but will not cause a massive movement upwards. A lot is required for stocks to move upwards.

 This is not the first time that the industry is quite bullish about the prospects of SPY and the stock market in general. It has been going on like this for the last five years, and may continue into the foreseeable future as well. In the last six to ten years, the market has only experienced peak performance in 2000 and 2007. The trend would probably have continued if the market had not been messed up with the financial crisis of 2008. The market has been bullish despite the absence of clear reasons for behaving in this manner or holding such a view.

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