The trading week ending on Friday, 24 June 2022 ended with a bang for the S&P 500 (Index: SPX), which experienced its eighth Lévy flight event of the year. The index closed the week at 3,911.74, rising 3.06% just on Friday, 24 June 2022 alone and gaining 6.45% from the previous week's close. The index is now 18.4% below its 3 January 2022 record peak, rising back above the 20% decline threshold that defines a bear market.

If you're new to the concept of Lévy flights and how they apply to stock prices, here's a quick primer. They are perhaps most easily understood as the outsized changes in stock prices that occur more frequently than would be predicted assuming the day-to-day variation in stock prices is described by a normal distribution from conventional statistics. Their variation is better described by the math for Lévy stable distributions, which have "fatter tails" than what you'll see in the normal distribution's bell curve.

In the dividend futures-based model we use to project the potential future trajectories of stock prices, these events can be seen occurring whenever investors shift their forward-looking time focus from one point of time in the future to another. In past week, the alternative futures chart confirms investors fully shifted their forward time horizon to 2022-Q3 after having fully focused it on 2022-Q2 in the previous week.

Not that they had any choice. The expiration of 2022-Q2's dividend futures contracts on 17 June 2022 represented the clock running out on the future of 2022-Q2. Its end meant investors had no choice but to shift their focus to a different point of time in the future, where they've fixed it on 2022-Q3. Again. For now.

From our perspective, the first half of 2022 has proven to be an exciting time. That's because of the large difference between the potential trajectories of the S&P 500 for the alternative trajectories for 2022-Q2 and 2022-Q3, which are set by the expectations for changes in the rate of dividend growth for these two quarters. The cluster of volatility the stock market has experienced in the year to date has seen investors repeatedly shifting their forward-looking attention between these two quarters, producing an unusually high number of atypically large Lévy flight events in the process.

Those shifts have come as investors absorbed and responded to the random onset of new information throughout this period. We've tracked the market-moving news that has prompted those shifts throughout our S&P 500 chaos series during 2022. Here are the market-moving headlines we noted during the latest week that was.

Tuesday, 21 June 2022

• Signs and portents for the U.S. economy:
• Yellen says gasoline tax holiday worth considering as anti-inflation tool
• U.S. home sales slide as prices break above $400,000 for first time
• Fed minions engage in wishful thinking, want bigger rate hike in July:
• Fed's Bullard: I hope U.S. economy repeats outcome of 1994's soft landing
• Demand issues account for one-third of U.S. inflation spike - SF Fed
• White House economist Boushey remains optimistic U.S. can avoid recession
• Fed's Barkin backs 50 or 75 bps rate hike in July
• China makes Russia its top oil supplier:
• China May oil imports from Russia soar to a record, surpass top supplier Saudi
• BOJ minions in cahoots with government to prop up yen while keeping never-ending stimulus going:
• BOJ and govt closely coordinating on FX, Kuroda says after meeting PM
• Japan Finance Minister says to respond to FX moves appropriately if necessary
• Japan PM Kishida backs BOJ ultra-easy policy while yen worries mount
• ECB minions worrying about what Europeans are feeling, think they should support the Euro, fear fragmentation, say there's no free ECB lunch plan:
• Euro zone at risk of "inflation psychology", ECB's Lane says
• New ECB tool must backstop commitment to euro - Villeroy
• ECB's moves to fight fragmentation are positive, Spain says
• ECB committed to act on fragmentation risks, Centeno says
• Euro zone governments shouldn't expect free lunch from ECB, governors say
• Wall Street gains over 2% in broad rebound
• Wall Street sees higher probability of U.S. recession next year
• Factbox-Wall Street sees gray skies ahead for equities as Fed tightens policy

Wednesday, 22 June 2022

• Signs and portents for the U.S. economy:
• U.S. tech companies yank job offers, leaving college grads scrambling
• Probability of Global Recession Nearing 50%: Citigroup Economists
• Fed minions "strongly committed" to hiking interest rates to combat inflation:
• Powell says Fed 'strongly committed' to bringing down inflation 'expeditiously'
• Instant view: Fed 'strongly committed' to bring down inflation 'expeditiously,' Powell says
• Fed's Powell: committed to inflation fight, not trying to trigger recession
• Fed to lift rates by 75 basis points in July, 50 bps in September - Reuters poll
• Inflation Was High Before Ukraine': Powell Tosses Biden Back Under The Bus
• Fed's Evans: will need to raise rates 'a good deal more'
• Fed's Evans: another big rate hike 'reasonable' for July
• Fed's Harker says interest rates should reach above 3%, then reassess
• Bigger trouble developing in Canada, U.K.:
• Canada inflation up near 40-year high; calls mount for 75-bps rate hike
• Bank of Canada says high inflation 'keeping us up at night'
• UK food price inflation set to hit 20%, Citi forecasts
• Germany Finance Minister wants ECB minions to stop thinking and start doing something about inflation:
• Germany's Lindner: ECB must get inflation under control
• Wall Street ends little changed after Powell remarks

Thursday, 23 June 2022

• Signs and portents for the U.S. economy:
• U.S. labor market remains tight; business activity slowing
• OPEC+ to stick to oil supply rise plan as Biden heads to Saudi - sources
• U.S. recession fears darken outlook for global growth
• Fed minions claim fight against inflation won't stop for recession, want bigger rate hikes:
• Fed's inflation fight is 'unconditional,' Powell says
• Fed's Bowman calls for steep rate hikes to fight inflation
• Bigger trouble developing in the Eurozone, U.K.:
• Euro zone business growth slumped in June as price hikes bite
• German economy loses momentum at the end of Q2 - PMI
• UK economy 'running on empty' as recession signals mount - PMI
• Other central banks acting to hike interest rates to combat inflation:
• Norway central bank makes largest rate hike in two decades
• Hike in Thai policy interest rate to be gradual - central bank
• Mexico central bank makes record rate increase, flags more hikes
• S&P 500 ends higher, boosted by defensives, tech

Friday, 24 June 2022

• Signs and portents for the U.S. economy:
• Oil settles up but posts weekly decline on recession fears
• U.S. new home sales unexpectedly rise in May
• U.S. new home sales rebound in May; prices soar
• U.S. consumer sentiment falls to record low, inflation outlook improves
• Fed minions really determined to convince people they'll do what it takes to break inflation, several decide to dump investments:
• Fed must act 'forthrightly and aggressively' to rein in inflation, Bullard says
• Fed's Barkin, Daly dump stocks, bonds after ethics scandal
• BOJ minions becoming like deer in headlights for commitment to never-ending stimulus policies:
• Japan's inflation tops BOJ target for 2nd month in test of monetary stance
• Japan govt spokesperson says caution needed on inflation's downside risks
• Japan May factory output seen dipping for 2nd month on China lockdown- Reuters poll
• BOJ deputy governor repeats vigilance of FX impact on economy
• ECB minions say they're not worried about EU-member bond yield spreads:
• ECB's Centeno says no yield spread goal in anti-fragmentation tool
• Wall Street posts big gains to end strong week
• Wall St rallies as traders dial back rate-hike bets

Data suggesting the U.S. economy is slowing more than expected is altering investor expectations for how the Federal Reserve will be setting interest rates to fight inflation. While the CME Group's FedWatch Tool still projects half point rate hikes for both July and September 2022 (2022-Q3), it now projects quarter point rate hikes at six-week intervals after that through 2022-Q4 and 2023-Q1, topping out in a range between 3.50 and 3.75% in February 2023. More remarkably, the FedWatch tool is now projecting a quarter point rate cut in June 2023 (2023-Q2), which is to say a response to a developing recession is now built into tool's projections.

The Atlanta Fed's GDPNow tool continued to forecast real GDP growth of 0.0% for the current quarter of 2022-Q2, unchanged from last week's running assessment. In remarks delivered on 21 June 2022, current U.S. Treasury Secretary and former Chair of the Federal Reserve Janet Yellen indicated she uses "two quarters of negative growth as a good rule of thumb to indicate a recession". Given the Atlanta Fed's GDPNow tool's projections, the U.S. economy may be on course to qualify as being in recession during the first two quarters of 2022 according to that rule of thumb. Not that there aren't some positive developments that may help forestall such an outcome, which we'll cover later this week.