After breaking through the 5,000 milestone to set a new record high last week, the S&P 500 (Index: SPX) retreated from that lofty level. The index dropped 0.4% from last week's close to end the trading week at 5,005.57.
You wouldn't think it from that description, but the S&P 500 did manage to eke out a new record high of 5,029.73 on Thursday, 15 February 2024. But the bigger news of the week was the stock market's response to two reports about inflation in the U.S. The first report on the Consumer Price Index prompted a 1.4% drop on Tuesday, 13 February 2024. The second report on the Producer Price Index sparked a half percent decline on Friday, 16 February 2024.
Both reports indicated higher-than-expected inflation to start 2024. Together, that new information affected investor expectations for the timing of when the Federal Reserve will begin cutting interest rates in 2024. The CME Group's FedWatch Tool's projections of when the Fed is expected to start a series of rate cuts has shifted. It now projects the Fed will hold the Federal Funds Rate steady in a target range of 5.25-5.50% until 12 June 2024 (2024-Q2), six weeks later than previously anticipated.
Here is this week's update of the dividend futures-based model's alternative futures chart.
Looking forward, we're coming up on a several week long period where the echoes of past volatility in stock prices affect the dividend futures-based model's projections. This situation arises because of the model's use of historic stock prices as the base reference points from which its projections are developed. The next update for the chart will feature a new redzone forecast range to account for this echo effect.
In the meantime, here are the market-moving headlines for the week that was.
- Monday, 12 February 2024
-
- Signs and portents for the U.S. economy:
- Job cuts spill beyond tech sector
- Real estate pain for US regional banks is piling up, say investors
- Oil settles little changed; demand concerns offset Middle East tensions
- Bigger trouble developing in the Eurozone:
- Rising Distress in Germany Signals a Lot More Struggles Ahead
- German commercial property prices post biggest-ever drop, data shows
- Euro zone banks face new slate of risks, supervisor warns
- Nasdaq, S&P, Dow end mixed as Wall Street's bull run takes a beat ahead of CPI
- Tuesday, 13 February 2024
-
- Signs and portents for the U.S. economy:
- Rising rents push US inflation higher; rate cuts still expected in 2024
- Labor worries, costs drag small business sentiment down by most in 13 months -NFIB
- Oil up on geopolitical tension, gains capped by fading Fed rate-cut hopes
- Number of US farms falls and size increases, census shows
- Fed seen waiting longer to cut rates as inflation stays elevated
- ECB minions ready to let inflation data decide next steps, bigger trouble developing in the Eurozone:
- Number of rate cuts will depend on inflation data, ECB's Lane says
- Germany is an unfit man, economy isn't in shape, finance minister says
- Wall St ends sharply lower as hot inflation sparks sell-off
- Wednesday, 14 February 2024
-
- Signs and portents for the U.S. economy:
- Oil falls by more than $1/bbl on US crude build, security threat worries
- Cisco to cut more than 4,000 jobs, lowers annual revenue forecast
- Frigid temperatures chill US retail sales, factory production
- Fed minions not so sure about "soft" landing for U.S. economy:
- Bigger trouble developing in Japan, Nikkei predicts BOJ minions will keep never-ending stimulus alive:
- Japan unexpectedly slips into recession, Germany now world's third-biggest economy
- Japan Enters Recession With Nikkei About To Hit All Time High
- Bigger trouble developing in Eurozone, ECB minions want to take some time to think about it:
- Euro zone Q4 GDP confirmed flat q/q, up 0.1% y/y
- ECB needs 'some time' before cutting rates: de Guindos
- Nasdaq, S&P, Dow end higher as Wall Street regains footing after CPI sell-off
- Thursday, 15 February 2024
-
- Signs and portents for the U.S. economy:
- Fed minions thinking about taking some time before acting to cut interest rates:
- Bigger trouble developing for Eurozone banks:
- ECB minions say they're in no rush to start cutting rates:
- ECB policymakers push back on hasty rate cuts even as inflation falls
- ECB must avoid hasty rate cut, says Lagarde
- Nasdaq, Dow extend rebound from CPI sell-off to second straight day; S&P closes at record
- Friday, 16 February 2024
-
- Signs and portents for the U.S. economy:
- Strong services price increases lift US producer inflation in January
- Oil edges up as geopolitical tensions offsets weaker IEA demand outlook
- Fed minions excited to hold rates where they're at until data tells them to start cutting them, getting worried about banks' exposure to distressed commercial real estate:
- Fed seen taking time on rate cuts amid inflation pressures
- Fed needs time, data, patience on inflation fight: Daly
- Fed's Bostic open to summer time rate cut - CNBC
- Fed's Barr says supervisors more aggressive, honing in on interest rate risk
- BOJ minions say they'll think about ending never-ending stimulus after they hit their inflation target:
- ECB minions say lack of productivity in Eurozone will keep inflation high:
- Wall Street slides as hot producer price data crimps rate cut bets
The Atlanta Fed's GDPNow tool's latest estimate of real GDP growth for the first quarter of 2024 (2024-Q1) declined to +2.9% from last week's estimate of +3.4%.
Image Credit: Microsoft Bing Image Generator. Prompt: "An editorial cartoon of a worried Wall Street bull looking backward over its shoulder at a bear. The bear has the word 'Inflation' written on it."
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
