The second full week of August 2018 was mostly uneventful for the S&P 500 (Index: SPX). From Monday, 6 August 2018 through Thursday, 9 August 2018, the index teased the possibility of topping its previous high record of 2,872.87 that was set back on 26 January 2018.
And then, for lack of a better description, Turkey happened, and the S&P 500 retreated by 0.7% on Friday, 10 August 2018 to close the week at 2,833.28.
To be fair, Turkey didn't so much happen as it finally started catching up to what has been happening to the country under the hands of its increasingly dictatorial ruler over the past five years, where the collapse of its currency on Friday, 10 August 2018 sent shock waves through the world's equity and emerging markets. Emerging markets, because of an elevated risk of contagion not seen since Greece's economy imploded earlier in the decade. Equity markets, because of the exposure of financial institutions to that contagion.
That's a short summary of the view from 30,000 feet. Here are the main market-moving headlines we noted for Week 2 of August 2018.
- Monday, 6 August 2018
- Tuesday, 7 August 2018
- Wednesday, 8 August 2018
- Thursday, 9 August 2018
- Friday, 10 August 2018
Looking at the bigger picture, Barry Ritholtz found that there were more negatives than positives in the week's economy and markets news.
Sharp-eyed readers will note that we've added one of our redzone forecasts to the spaghetti forecast chart we use to anticipate the future for the S&P 500 based on our dividend futures-based model, which we do to account in part for the volatility in the historic stock prices that we use as the base reference points from which we project future stock prices.
Here, we're assuming that investors will continue to split their forward-looking focus between 2018-Q4 and 2019-Q1 in setting stock prices in the period from 8 August 2018 to 11 September 2018, but will tend to more heavily weight that more distant future quarter in setting their expectations. We've also drawn the new redzone forecast more narrowly than we did earlier in the quarter, so that it reflects the historically typical level of volatility that we've seen in stock prices during the past seven decades.
Given current market circumstances, that new redzone forecast may be drawn too narrowly, where we may see the trajectory of the S&P 500 move outside of that range without necessarily confirming a true shift in the forward-looking focus of investors. On the plus side, if that does happen, we'll have a nice visual confirmation that stock prices are experiencing extreme volatility.
Welcome to the blogosphere's toolchest! Here, unlike other blogs dedicated to analyzing current events, we create easy-to-use, simple tools to do the math related to them so you can get in on the action too! If you would like to learn more about these tools, or if you would like to contribute ideas to develop for this blog, please e-mail us at:
ironman at politicalcalculations
Thanks in advance!
Closing values for previous trading day.
This site is primarily powered by:
CSS Validation
RSS Site Feed
JavaScript
The tools on this site are built using JavaScript. If you would like to learn more, one of the best free resources on the web is available at W3Schools.com.
Other Cool Resources
Blog Roll
