Unexpectedly Intriguing!
03 June 2019

In closing the week at a value of 2,752.06 on Friday, 31 May 2019, the S&P 500 (Index: SPX) completed its second Lévy flight event of 2019.

Unlike the year's first Lévy flight event back in January, which was a positive affair, the second Lévy flight for the S&P 500 saw stock prices fall as investors shifted their forward looking focus from the distant future quarter of 2020-Q1 and the more positive expectations associated with it back toward the nearer term quarters of 2019-Q3/Q4. The shift took place as the S&P 500 fell by 124.26 points (4.3%) in the 10 trading days between 16 May 2019 and 30 May 2019. Our alternative futures spaghetti forecast chart captured the shift as it happened:

Alternative Futures - S&P 500 - 2019Q2 - Standard Model - Snapshot on 31 May 2019

As Lévy flights go, this new event was a pretty mild one in that it took 10 days for the trajectory of the S&P 500 to traverse the relatively short distance between the alternate trajectories our dividend futures-based model has been projecting for 2020-Q1 and for 2019-Q3/Q4, where we're not differentiating between these two earlier quarters because their forecast trajectories are nearly identical.

The CME Group's FedWatch Tool confirms investors have shifted their attention toward the nearer term, as they are now betting that the Fed will cut its Federal Funds Rate in both the third and fourth quarters of 2019.

CME Group FedWatch Tool - Probabilities of Federal Funds Rate Changes at Selected Upcoming Federal Reserve Meetings - Snapshot 31 May 2019

As for that flow of news that pushed investors to focus on 2019-Q3 and 2019-Q4 and the expectations for stock prices associated with these quarters, here are the headlines that moved stock prices during the fifth and final week of May 2019.

Tuesday, 28 May 2019
Wednesday, 29 May 2019
Thursday, 30 May 2019
Friday, 31 May 2019

Elsewhere, Barry Ritholtz counted up positives and negatives he found among the week's major economic and market-related news, so if these headlines weren't enough for you, there are more out there!

Labels: ,

About Political Calculations

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.com

Thanks in advance!

Recent Posts

Stock Charts and News

Most Popular Posts
Quick Index

Site Data

This site is primarily powered by:

This page is powered by Blogger. Isn't yours?

CSS Validation

Valid CSS!

RSS Site Feed

AddThis Feed Button

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

Market Links

Useful Election Data
Charities We Support
Shopping Guides
Recommended Reading
Recently Shopped

Seeking Alpha Certified

Archives
Legal Disclaimer

Materials on this website are published by Political Calculations to provide visitors with free information and insights regarding the incentives created by the laws and policies described. However, this website is not designed for the purpose of providing legal, medical or financial advice to individuals. Visitors should not rely upon information on this website as a substitute for personal legal, medical or financial advice. While we make every effort to provide accurate website information, laws can change and inaccuracies happen despite our best efforts. If you have an individual problem, you should seek advice from a licensed professional in your state, i.e., by a competent authority with specialized knowledge who can apply it to the particular circumstances of your case.