The S&P 500 (Index: SPX) mostly drifted sideways during the third week of August 2022, before dipping on Friday, 19 August 2022 to close the week at 4,228.48.
Here's how that change looks on the latest update to the dividend futures-based model's alterative futures forecast chart:
The week held little in the way of market moving news, with the next big event that might move the market's coming when the members of the Federal Reserve meet at their annual retreat in Jackson Hole, Wyoming. The dividend futures-based model indicates investors' main quarter of interest continues to be 2023-Q1. However, we can't help but note that whatever news comes out of Jackson Hole in the upcoming week will present investors with an opportunity to shift their focus to the much nearer term time horizon without greatly affecting the level of stock prices.
As for the week that was, the small dip in the index' level was associated with "recession jitters" in the week's market-moving headlines from Friday, 19 August 2022:
- Monday, 15 August 2022
- Signs and portents for the U.S. economy:
- U.S. home builder sentiment, New York state factory activity drop
- Oil settles lower on weak economic Chinese economic data
- Bigger trouble developing in China:
- Marketmind: Fasten your seat belts
- China new bank loans tumble more than expected amid property jitters
- China new home prices in July unchanged from June, down 0.9% y/y
- China unexpectedly cuts 2 key rates, withdraws cash from banking system
- China to lift Aug fuel exports but 2022 shipments to drop to 7-year lows
- Chinese developers in 'survival mode' slash property investment
- Bigger stimulus developing in China:
- Bank of England expected to deliver more rate hikes:
- Wall Street climbs, adding to recent gains as megacaps rise
- Tuesday, 16 August 2022
- Signs and portents for the U.S. economy:
- U.S. housing starts tumble in July; building permits fall
- Oil falls to 6-mth low on economic data, awaits news of Iran nuclear deal
- U.S. manufacturing production accelerates in July
- Bigger trouble developing in China:
- Bigger stimulus developing in China:
- China will step up policy support for economy, premier tells state media
- China supports several private developers with bond guarantee -sources
- Dow, S&P 500 climb as upbeat results from Walmart, others boost optimism
- Wednesday, 17 August 2022
- Signs and portents for the U.S. economy:
- U.S. retail sales flat on gasoline price drop; consumer spending resilient
- Oil edges off low as strong export demand drains U.S. crude stocks
- Pricey pencils, paper: U.S. teachers get schooled in inflation
- Fed minions see inflation, think they're about to start losing money, say more women will go to work:
- Fed minutes show more rate hikes in the pipeline, but pace could slow
- Fed staff sees bond portfolio income turning negative in coming months
- Fed's Bowman sees strong U.S. labor market bringing more women back to work
- Bigger trouble, stimulus developing in China:
- China's fiscal revenue growth slows slightly amid sluggish economic recovery
- Chinese vice premier urges greater effort to boost consumption
- Bigger trouble developing in the U.K.:
- More central banks ramping up more rate hikes:
- ECB minions focusing on regulating cryptocurrency:
- Wall Street ends down, but indexes briefly cut losses after Fed minutes
- Thursday, 18 August 2022
- Signs and portents for the U.S. economy:
- Oil up 3% on robust U.S. fuel consumption, tight supply outlook
- U.S. labor market resilient despite rate hikes; housing market wilting
- Fed minions on a mission to hike rates, only question is by how much:
- Fed united on need for higher rates, divided over how high
- Fed must get inflation down urgently, Kashkari says
- Fed's George says pace, endpoint of rate hikes still matter of debate
- Fed's Powell to speak on Aug. 26 at Jackson Hole conference
- Bigger trouble developing in China:
- China central bank, under pressure to ease, is hemmed-in by inflation, Fed jitters
- Exclusive-China regulator launches new probe into banks' property loan exposure - sources
- Bigger trouble developing in the Eurozone:
- ECB minions notice Eurozone inflation hasn't improved:
- Wall St ends higher, Cisco Systems jumps after forecast
- Friday, 19 August 2022
- Signs and portents for the U.S. economy:
- Fed minions trying to play coy about plan for more rate hikes:
- Bigger trouble developing in Japan:
- Bigger trouble developing in the Eurozone:
- German dependence on China growing 'at tremendous pace', research shows
- Record jump in German producer prices adds to gloomy outlook
- Bigger stimulus developing in China:
- China set to lower lending benchmarks to revive wobbly economy
- China to boost targeted policy support for economy -state media citing cabinet
- ECB minions starting to think they'll need to keep hiking rates:
- Wall Street ends down as yields rise; indexes post weekly losses
There was little change in the CME Group's FedWatch Tool's projections of the Fed's future interest rate hikes to follow last week’s action. Investors still expect half point rate hikes in September 2022 (2022-Q3) and November (2022-Q4), followed by a quarter point rate hike in December (2022-Q4), with rates topping out in a target range of 3.50-3.75%. The probability of a rate cut is elevated from June 2023 onward but is below 50%.
The Atlanta Fed's GDPNow tool's forecast for real GDP growth in 2022-Q3 dropped to 1.6%, down from last week's projection of 2.5% growth.
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Closing values for previous trading day.
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