Political Calculations
Unexpectedly Intriguing!
25 January 2022

When we say the bottom dropped out of the S&P 500 (Index: SPX) last week, what does that really mean?

It seems obvious that we're referring to the decline in stock prices, but there's much more to it than that. After all, the stock market has weeks when its value rises and has weeks when its value falls from the previous week, but we don't claim the bottom has dropped out of the index every time the latter situation happens. What makes the trading week ending 21 January 2022 different?

It wasn't the rate at which stock prices declined. On no single day of the holiday-shortened trading week did the S&P 500 drop by more than 2% of their previous day's closing value, the volatility threshold we use for any given day's trading to qualify as being interesting.

Nor did the overall 8.3% decline of the index since its 3 January 2022 record high qualify as interesting, falling less than the 10% threshold that it would take to qualify as a correction in stock prices according to professional traders. By both these definitions, what happened in the Nasdaq composite index (Index: COMP) during the past three weeks qualifies as interesting, but not so much for the more diverse S&P 500.

Instead, our observation has a lot to do with how stock prices were behaving in recent months. Here, let's start with the latest update to our chart showing the S&P 500's periods of relative order and chaos, which now covers the full 30-year period from December 1991 through December 2021.

S&P 500 Average Monthly Index Value vs Trailing Year Dividends per Share, December 1991 to December 2021

According to a long-standing set of technical definitions we developed, here's how we define when a period of order exists in the market:

Order exists in a market whenever the change in the price of assets in the market are closely coupled with the change in the income that might be realized from owning or holding the assets, within a band of approximately normal variation about a central tendency.

In the case of the stock market, the assets are stocks, the price of which is given by the value of the S&P 500 index. The income that might be realized from owning or holding the assets are dividends, represented in the chart by the index' trailing year dividends per share.

When we refer to these two things being closely coupled, we mean when both the value of the S&P 500 and the index' trailing year dividends per share are either rising or falling together in a general trend. When that coupling exists, the variation of stock prices about a mean trend line can be approximately described by a normal distribution.

Looking at the most recent period of our 30-year chart, we see the period from March 2021 through December 2021 could reasonably qualify as a period of order according to our definition. Both stock prices and dividends per share have both been rising during these months.

Our next chart zeroes in on this period with daily data, where we confirm a close coupling exists in the period from 30 June 2021 through the end of 2021 and into January 2022.

S&P 500 Index Value vs Trailing Year Dividends per Share, 31 March 2021 to 21 January 2022

We've added statistical control chart-style thresholds to the chart to visualize a statistical hypothesis test. Here, when stock prices fall within three standard deviations of the mean trend, order can be said to exist for the S&P 500. Once stock prices fall outside that range indicated by the red dashed lines, we reject the hypothesis that order exists in the market.

On 21 January 2022, we see the level of stock prices drop below that key statistical threshold. We confirm order has broken down for the S&P 500 in this analytical approach and has done so by breaking through the lower limit of the range we would expect to find stock prices had the short established period of relative order in the U.S. stock market not broken down. This backward-looking approach confirms the similar assessment we arrived at using a forward-looking model.

To put it more colorfully, the bottom has dropped out of the S&P 500.

And now you know why we can say that! Now the question has become "is what happened on 21 January 2022 an outlier event and the trend still holds, or has it truly broken down?" We'll learn the answer to that question as early as this week.

Previously on Political Calculations

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24 January 2022

Do you remember 3 January 2022? On the first trading day of the year, the S&P 500 (Index: SPX) closed at an all-time record high of 4,796.56.

Since then, the index has fallen by 398.62 points (or 8.3%), with two-thirds of that decline in the past week. On the alternative futures chart, that drop during the past week looks like bottom dropping out with the trajectory of the S&P 500 shooting below the dividend futures-based model's lowest projections for this period.

Alternative Futures - S&P 500 - 2022Q1 - Standard Model (m=-2.5 from 16 June 2021) - Snapshot on 21 Jan 2022

On a side note, it's not just this chart showing the bottom dropping out of the S&P 500. We have another chart that will better drive that point home, which we'll present in a separate analysis.

Since Friday, 21 January 2022 saw atypically large values of options expiring, the jury is still out on how much noise that contributed to the market's action, so we're paying especially close attention to the new week's trading activity. With that event in the past, we should get a clearer signal on where stock prices are heading in short order.

We're also paying attention to how we might need to reset the level of the dividend future model's multiplier, which is something we've anticipated since December 2021 might become necessary with the Federal Reserve altering its monetary policies. That's in addition to paying attention to the market-moving headlines as they hit the newstreams, where we noted the following stories in the past week.

Tuesday, 18 January 2022
Wednesday, 19 January 2022
Thursday, 20 January 2022
Friday, 21 January 2022

As of 21 January 2022, the CME Group's FedWatch Tool projects quarter point rate hikes in March 2022 (2022-Q1), June (2022-Q2), July (2022-Q3), and December (2022-Q4).

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21 January 2022

It's January, which means the airwaves are cluttered once more with advertisements for weight loss programs and physical fitness equipment. But in much of the world, icy and snowy winter weather makes it difficult for those suddenly obsessed with weight loss to go outside to pursue the physical activities they're counting on to fit back into the clothes they wore before the holidays. If only there was a patented invention that could help!

You're in luck, because not only is there such an invention, it's 101 years old! Inventor Tom Doroszuk was issued U.S. Patent 1,324,342 for his innovation combining bicycle technology with sleigh technology to produce the Bicycle Sleigh:

U.S. Patent 1,324,342 Figures 1 and 2

Doroszuk's invention merges a bicycle frame onto a larger structure supported on a tricycle of skis. When the rider peddles the bicycle sleigh, it turns a paddlewheel mounted in place of the rear bicycle to provide propulsion on snow-or-ice-covered surfaces. So not only can you can you get exercise on the Bicycle Sleigh, you can get to where you're going when the roads are covered with snow and ice!

Or rather, you could theoretically get exercise and get to where you're going, if only the Bicycle Sleigh existed in today's world. We couldn't find so much as a single TikTok or YouTube influencer willing to bring their version of the now public domain-invention to life.

We did however find the next closest thing: ski bikes, which are really a thing, if only useful for going downhill!

Time will tell if the 21st century see a bicycle sleigh revival.

Inventions in Everything: The Archives

But wait, there's so much more! Our archives, now fully updated through 2021, celebrate inventions ranging from the whimsical to the inspired in reverse chronological order!


20 January 2022

There are few products as iconic as Campbell's Condensed Tomato Soup. Since being invented in 1897 and introduced to American consumers in 1898, Campbell Soup (NYSE: CPB) has produced, marketed, distributed, and successfully sold billions of Number 1 cans filled with condensed tomato soup.

Political Calculations has compiled the price history of Campbell's Condensed Tomato Soup going back to January 1898. We've tracked the price of Campbell's iconic tomato soup over the past 124 years because of its remarkable consistency as an identifiable product over time. In fact, if you had a time machine and could travel to nearly any point in time from January 1898 to the present, you could likely find a 10.75 ounce size can of Campbell's condensed tomato soup stocked for sale in American grocery stores.

That long-running consistency makes Campbell's Condensed Tomato Soup an ideal product to follow to understand how inflation has affected American consumers through its history. Today, we're updating our chart visualizing that history from January 1898 through January 2022.

Campbell's Condensed Tomato Soup Unit Price per Can, January 1898 - January 2022 (Linear Scale)

In January 2022, we find the prevailing sale price is moving toward $1.00 per can as discounted sale pricing by U.S. retailers has become both smaller and less frequent than was the case before March 2021, when President Biden's inflation kicked off, fueled by the stimulus checks and advance child tax credit payments he implemented after coming into power.

That's ten times the original price American grocery shoppers paid when the Campbell company began selling their just-invented condensed soup products in 1898. Because its price history spans a full order of magnitude, showing the price history in logarithmic scale gives a better sense of how much and when inflation has affected the prices American consumers pay for Campbell's Condensed Tomato Soup.

Campbell's Condensed Tomato Soup Unit Price per Can, January 1898 - January 2022 (Logarithmic Scale)

Speaking of what American consumers are seeing when they go shopping for tomato soup in January 2022, many are seeing empty grocery shelves. The following two photos were snapped at the same Walmart location one week apart earlier in the month. They show the regular shelf spaces for where shoppers would expect to find Campbell's tomato and chicken noodle soups. If they're in stock, which you'll see was not the case on 7 January 2022, but were on 14 January 2022, though supplies on the later date were limited.

7 January 2022

Walmart, Campbell's Condensed Tomato Soup Shelf, Snapshot on 7 January 2022

14 January 2022

Walmart, Campbell's Condensed Tomato Soup Shelf, Snapshot on 14 January 2022

During soup season, Walmart will often have a special aisle-display for these soups. That was not the case on either of the dates these photos were taken. What these photos indicate is that Walmart, the largest food retailer in the U.S. by volume of sales, is having trouble keeping its shelves stocked with Campbell Soup's top two-selling soups. That's not the case at other grocery stores in the same area, which shared one characteristic: their shelf prices for Campbell's Condensed Tomato Soup are higher than Walmart's $0.98 per can price.

Update 23 January 2022: Our field correspondent reports the Walmart location whose shelves are pictured above succeeded in more fully restocking its supply of Campbell's condensed tomato and chicken noodle soups.

We're also not seeing the same kinds of discounted sale pricing we observed a year ago. The absence of discounts confirms the presence of inflation for Campbell's tomato soup that wasn't present a year ago.

Previously on Political Calculations

Political Calculations' analysis of Campbell's Tomato Soup dates back to 2015! Along the way, we've filled in the gaps we had in the historic price data and have explored America's second-most popular soup from a lot of different angles.

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19 January 2022

When we last reviewed Arizona's coronavirus pandemic experience in mid-December 2021, we reported the Delta-variant wave looked to be peaking. In fact, we followed up with an update to that article on 21 December 2021 to confirm it.

Since we reported that data, the Omicron-variant of the SARS-CoV-2 coronavirus arrived, with a rate of spread that exceeds each of the previous waves Arizona has experienced. At least, that's what immediately leaps out in the newest update to our chart tracking Arizona's Coronavirus Pandemic Experience, so let's go straight to it.

Arizona's Coronavirus Pandemic Experience, 15 March 2020 - 17 January 2022

The data for cases, hospitalizations, and deaths presented in this chart has been aligned with respect to the approximate date for when those who tested positive, were admitted to hospital, or died would have first been exposed to SARS-CoV-2 coronavirus variants. Presenting the data this way makes it possible to visually identify when the incidence of infection changes. Having that information often makes it possible to identify significant events that affected the trends for COVID infections.

Based on Arizona's data for cases and for new hospital admissions, the Omicron variant of the coronavirus began noticeably spreading approximately on or around 19 December 2021. That's the weekend before the Christmas holiday, which points to public events like shopping, Phoenix' Fiesta Bowl Parade, and pre-holiday social events as the likely venues in which infections of the Omicron coronavirus variant took hold in the state. Unlike the most recent uptrend, few high-attendance sporting events took place Arizona during that period. We likewise expect to see similar liftoff in the data for COVID deaths as that much longer lagging data becomes available.

Behind the scenes, we've looked at new hospital admission data that has not yet been added to this chart because it is less than 95% of the value where it will stabilize for the indicated dates. Based on that partially complete information, we anticipate the data for COVID hospitalizations will parallel the rapid increase already evident for cases confirmed by testing.

Meanwhile, the data for COVID deaths in Arizona during this period is far too incomplete as yet to add an additional confirmation of the 19 December 2021 date marking the arrival of widespread Omicron-variant coronavirus infection in Arizona. The state's data for ICU admissions however points to 19 December 2021 as the kickoff date for the spread of Omicron-variant COVID cases, assuming a 13-day lag from initial exposure, which we see with COVID-infected ICU patients beginning to increase after 1 January 2022. That change in trend may be seen in Arizona's ICU bed usage chart.

Arizona COVID-19 ICU Bed Usage, 15 March 2020 - 15 January 2022

While rising in response to Omicron-variant cases, ICU bed usage data points to a lower growth rate for serious cases requiring ICU facilities at this time.

Arizona's ICU COVID-19 bed usage chart also points to an unusual development, in which the number of Arizona's intensive care units was arbitrarily reduced by about 90 units on 18 December 2021, with the impact concentrated in beds being used by non-COVID ICU patients. We have found no contemporary reporting to explain why that happened. Since we previously reported Arizona's available supply of ICU beds was becoming pinched in early December 2021, we believe that decision should be called into question given the developing situation with the Omicron variant in the state.

We'll close with some better news. Going back to the first chart, we see the rate at which new COVID cases are occurring in Arizona has begun to slow in the period since 1 January 2022. Though it is still rising, which we anticipate will continue for several weeks, each previous wave of COVID infections in Arizona was preceded by a similar deceleration before peaking.

Previously on Political Calculations

Here is our previous coverage of Arizona's experience with the coronavirus pandemic, presented in reverse chronological order.


Political Calculations has been following Arizona's experience with the coronavirus experience from almost the beginning, because the state makes its high quality data publicly available. Specifically, the state's Departent of Health Services reports the number of cases by date of test sample collection, the number of hospitalizations by date of hospital admission, and the number of deaths by date recorded on death certificates.

This data, combined with what we know of the typical time it takes to progress to each of these milestones, makes it possible to track the state's daily rate of incidence of initial exposure to the variants of the SARS-CoV-2 coronavirus using back calculation methods. Links to that data and information about how the back calculation method works are presented below:

Arizona Department of Health Services. COVID-19 Data Dashboard: Vaccine Administration. [Online Database]. Accessed 17 January 2022.

Stephen A. Lauer, Kyra H. Grantz, Qifang Bi, Forrest K. Jones, Qulu Zheng, Hannah R. Meredith, Andrew S. Azman, Nicholas G. Reich, Justin Lessler. The Incubation Period of Coronavirus Disease 2019 (COVID-19) From Publicly Reported Confirmed Cases: Estimation and Application. Annals of Internal Medicine, 5 May 2020. https://doi.org/10.7326/M20-0504.

U.S. Centers for Disease Control and Prevention. COVID-19 Pandemic Planning Scenarios. [PDF Document]. 10 September 2020.

More or Less: Behind the Stats. Ethnic minority deaths, climate change and lockdown. Interview with Kit Yates discussing back calculation. BBC Radio 4. [Podcast: 8:18 to 14:07]. 29 April 2020.

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