The market is showing signs of increased optimism, with the CNN Money Fear and Greed index remaining in the ‘Greed’ zone on Friday, suggesting a positive shift in investor sentiment. This comes after a week of strong performance for U.S. stocks, with the S&P 500 and Dow Jones index climbing to fresh highs.
The gains were fueled by a combination of positive economic data and strong earnings reports from major companies. Core producer prices in the U.S. increased by 0.2% in September, indicating continued economic growth.
Wells Fargo & Company reported better-than-expected earnings for its third quarter, resulting in a 5.6% surge in its share price on Friday. JPMorgan Chase & Co. also delivered positive third-quarter results, contributing to the overall bullish sentiment.
Most sectors on the S&P 500 ended the day on a positive note, with financials, real estate, and industrials stocks experiencing the most significant gains. However, consumer discretionary and information technology stocks bucked the trend, closing the session lower.
The Dow Jones closed higher by approximately 410 points to 42,863.86 on Friday. The S&P 500 rose 0.61% to 5,815.03, while the Nasdaq Composite gained 0.33%, closing at 18,342.94 during Friday’s session.
Investors are now awaiting earnings results from Karooooo Ltd. KARO.
Understanding the CNN Business Fear & Greed Index
The Fear & Greed Index is a tool that measures the current market sentiment. It operates on the principle that higher fear exerts downward pressure on stock prices, while higher greed has the opposite effect. The index is calculated based on seven equally weighted indicators, ranging from 0 to 100, with 0 representing maximum fear and 100 signaling maximum greediness.
With a current reading of 74.3, the index remains firmly in the ‘Greed’ zone, suggesting that investors are feeling optimistic about the market’s direction.
