The S&P 500 (Index: SPX) bounced up to reach a new high closing value of 2,945.83 on Tuesday, 30 April 2019, before dipping back on the next two trading days and finally closing a fraction of a point below that level on Friday, May 2019.
The level of the S&P 500 is consistent with investors focusing on the distant future quarter of 2020-Q1 in setting current day stock prices, which in our dividend futures-based model of how stock prices work, covers the period from 21 December 2018 through 20 March 2020, coinciding with the dividend futures contracts for that quarter.
That view is also consistent with where the expectations of future rate cut by the U.S. Federal Reserve have shifted during the past week, thanks to the Federal Reserve's announcement and subsequent communication that the U.S. central bank sees no need to change its target for short term interest rates in the U.S. either at this time or through 2019.
That was, by far, the biggest news of the trading week that ended on Friday, 3 May 2019, where we flagged the following headlines as particularly noteworthy for their influence in setting the forward-looking focus of investors.
- Monday, 29 April 2019
- Oil climbs, shaking off Trump calls for OPEC to offset Iran sanctions
- Bigger stimulus developing in China:
- China spends $73 billion on transport infrastructure in March quarter: ministry
- Stimulus traction: China developers push land prices up as credit, purchase rules ease
- IMF's Lagarde expects U.S. and China to reach trade deal
- S&P 500 posts high, extends 2019 rally; Alphabet falls late
- Tuesday, 30 April 2019
- Oil pares gains as fears ease on Venezuelan exports
- Bigger stimulus developing in China:
- China to use $14.9 billion from unemployment insurance fund to support jobs
- China is building an armada
- Signs of traction? China's metals imports robust despite macro doubts: Andy Home
- Speaking of stimulus:
- Trump, Democrats agree to $2 trillion on infrastructure: Schumer
- As Fed meets, Trump calls for sharp rate cut, stimulus
- S&P 500 posts best four-month run in nearly nine years; Apple jumps after hours
- Wednesday, 1 May 2019
- Oil prices mixed as talk of extending OPEC cuts faces rising U.S. supply
- Mixed signals:
- U.S. firms hire 275,000 workers in April, most nine months: ADP
- U.S. factory activity at two-and-half-year low, points to slowing economy
- U.S. Fed sees no strong case for hiking or cutting rates
- Wall Street drops after Fed chair dampens rate-cut hopes
- Thursday, 2 May 2019
- Friday, 3 May 2019
- Oil edges up after strong economic data, but ends week lower
- The Fed's minions speak out after public comments blackout period ends:
- Fed's Evans and Bullard: Some U.S. Fed officials are more worried by weak inflation
- St Louis Fed's Bullard says Fed's rate 'a little tight'
- Fed's Bullard says he is open to rate cut if inflation stays low
- Fed's Williams makes case for 'lower for longer' rates
- Fed 'at or close to' goals; inflation expectations 'stable': Clarida
- Fed's Clarida says he does not see evidence of looming recession
- Fed's Mester says inflation expectations stable, economy at an 'equilibrium'
- Mester makes rare call for use of policy rules amid broader Fed review
- Wall St. climbs as jobs data supports upbeat economic outlook
Elsewhere, Barry Ritholtz outlined the positives and negatives he found in the week's news for U.S. markets and the economy. There are seven of each this week, with the negatives pointing toward some degree of economic deceleration.