Unexpectedly Intriguing!
09 April 2018

Volatility was once again the name of the game in the U.S. stock market during the first week of April 2018. Starting from Friday, 30 March 2018's closing value of 2,640.87, the S&P 500 (Index: INX) bounced off an intraday low of 2,553.80 on Monday, 2 April 2018 before going on to rise as high as an intraday high of 2,672.08 on Thursday, 5 April 2018 - a swing of 4.4% from low of the week to high of the week - before dropping 85.8 points on Friday, 6 April 2018 to hit an intraday low of 2,586.27 before rebounding a bit to close the week at 2,604.47.

Which is to say that there was quite a lot of noise in the U.S. stock market during the week that was, but not so much as to deviate from generally following our dividend futures-based model's projected trajectory associated with investors being largely focused on the distant future quarter of 2019-Q1 in setting today's stock prices.

Alternative Futures - S&P 500 - 2018Q1 - Standard Model - Snapshot on 06 April 2018

Picking up from our analysis of our model's performance last week, we confirm that our model's projections are slightly overshooting the actual trajectory of the daily closing price of the S&P 500 as expected, but not by so much that we need to develop a red-zone forecast - we're going to let our standard model's forecast ride, with the understanding that it is likely to overshoot the actual trajectory of stock prices through 23 April 2018, and that the continuing elevated level of volatility in stock prices may exceed the "typical" level of volatility that we've built into our model's forecasts.

Here are the headlines that caught our attention as being noteworthy for their market-moving potential, where the noise being generated by the developing trade war between the U.S. and China would appear to be a leading contributor to the elevated level of volatility in the U.S. stock market.

Monday, 2 April 2018
Yoda: Begun the Trade Wars have
Tuesday, 3 April 2018
Wednesday, 4 April 2018
Thursday, 5 April 2018
Friday, 6 April 2018

This week, Barry Ritholtz found 5 positives and 7 negatives for the U.S. economy and markets in Week 1 of April 2018, but one of the negatives was that it's April and there is still snow in the weather forecast for a large portion of the U.S.!

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