S&P 500 Touches New High As Fed Sets Course Of Inaction

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by: Ironman at Political Calculations
Summary

The S&P 500 bounced up to reach a new high closing value of 2,945.83 on Tuesday, April 30, 2019, before dipping back on the next two trading days and finally closing a fraction of a point below that level on Friday, May 3, 2019.

The level of the S&P 500 is consistent with investors focusing on the distant future quarter of 2020-Q1 in setting current-day stock prices.

In our dividend futures-based model of how stock prices work, that covers the period from December 21, 2018, through March 20, 2020, coinciding with the dividend futures contracts for that quarter.

The S&P 500 (Index: SPX) bounced up to reach a new high closing value of 2,945.83 on Tuesday, April 30, 2019, before dipping back on the next two trading days and finally closing a fraction of a point below that level on Friday, May 3, 2019.

The level of the S&P 500 is consistent with investors focusing on the distant future quarter of 2020-Q1 in setting current-day stock prices, which, in our dividend futures-based model of how stock prices work, covers the period from December 21, 2018, through March 20, 2020, coinciding with the dividend futures contracts for that quarter.

That view is also consistent with where the expectations of future rate cut by the U.S. Federal Reserve have shifted during the past week, thanks to the Federal Reserve's announcement and subsequent communication that the U.S. central bank sees no need to change its target for short-term interest rates in the U.S. either at this time or through 2019.

That was, by far, the biggest news of the trading week that ended on Friday, May 3, 2019, where we flagged the following headlines as particularly noteworthy for their influence in setting the forward-looking focus of investors.

Monday, April 29, 2019

Tuesday, April 30, 2019

Wednesday, May 1, 2019

Thursday, May 2, 2019

Friday, May 3, 2019

Elsewhere, Barry Ritholtz outlined the positives and negatives he found in the week's news for U.S. markets and the economy. There are seven of each this week, with the negatives pointing toward some degree of economic deceleration.

Editor's Note: The summary bullets for this article were chosen by Seeking Alpha editors.