Political Calculations
Unexpectedly Intriguing!
August 20, 2019

Every three months, we take a snapshot of the expectations for future earnings in the S&P 500 at approximately the midpoint of the current quarter, shortly after most U.S. firms have announced their previous quarter's earnings.

The earnings outlook for the S&P 500 has weakened since our Spring 2019 edition. The projected trailing year earnings per share for the index in December 2019 has fallen from the $150.96 forecast three months earlier to $146.63 this month.

Forecasts for S&P 500 Trailing Twelve Month Earnings per Share, 2014-2020, Snapshot on 15 August 2019

The oddest thing about this chart is the projected boost to earnings for 2019-Q4. We don't know any reason why Standard & Poor's trailing year earnings is so optimistic in this quarter after deflating so much in the quarters preceding it.

Looking at that optimism even further out, expected earnings for the S&P 500 at the end of 2020 have also weakened, but by a smaller amount, falling from $167.97 to $166.51 per share, where S&P is projecting a sharply upward trajectory.

You can see in the chart how those projections turned out during 2018 and 2019. These will almost certainly be revised downward, sharply, in upcoming quarters.

Data Source

Silverblatt, Howard. Standard & Poor. S&P 500 Earnings and Estimates. [Excel Spreadsheet]. 15 August 2019. Accessed 16 August 2019.

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August 19, 2019

For a week where the full U.S. Treasury yield curve inverted as stock prices were quite volatile, the week didn't end all that much differently than the previous week did.

By the end of the week, the S&P 500 (Index: SPX) was about one percentage point lower than a week earlier, as investors continued splitting their forward-looking attention betweeen 2019-Q4 and 2020-Q1. And while investors flirted with focusing more closely on 2019-Q4 during the week, there wasn't enough in the news to shift it more fully onto that particular point of time in the future.

Alternative Futures - S&P 500 - 2019Q3 - Standard Model - Snapshot on 16 Aug 2019

At this point, investors are betting the Federal Reserve will be forced to act aggressively to cut short term interest rates in a bid to revert the yield curve, with the CME Group's FedWatch Tool now projecting as many as four quarter point rate cuts in the four quarters ahead:

CME Group FedWatch Tool Probabilities of Federal Funds Rate Changing at Future FOMC Meeting Dates, Snapshot on 16 August 2019

We think the uncertainty of the timing of rate cuts between 2019-Q4 and 2020-Q1 is what is holding investors' attention on these two future quarters for now, but the potential deterioration of economic circumstances that would lead to the increased probability of rate cuts extending into 2020-Q2 could spark a much more negative reaction in stock prices should investors have reason to really focus on that particular future quarter.

There's also the potential that changes in the expectations for dividends in any of these upcoming quarters will have an impact on stock prices as well. Fortunately, dividend futures have so far been largely stable, where much of the outsized volatility we've seen may be attributed to investors shifting their time horizons in setting their expectations.

That's why we make a point of tracking the market moving headlines each week, which we've presented below. The random onset of new information plays a large role in setting the forward-looking focus of investors.

Monday, 12 August 2019
Tuesday, 13 August 2019
Wednesday, 14 August 2019
Thursday, 15 August 2019
Friday, 16 August 2019

Looking for the bigger picture of the week's news than the headlines we've noted above? Barry Ritholtz lists seven positives and only five negatives in the week's economics and market-related news.

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August 16, 2019

The U.S. Treasury Department has revised its estimates of the amount of money the U.S. government owed to various foreign countries, which allows us to finalize the data for the government's fiscal 2018 for which we had presented preliminary figures earlier this year.

From the end of its 2017 fiscal year to the end of its 2018 fiscal year, the U.S. government's total public debt outstanding increased by $1,271 billion, or $1.3 trillion, to reach a total of $21,516 billion, or $21.5 trillion. Put a little bit differently, the U.S. national debt grew at an average rate of nearly $3.5 billion per day on every day of the government's 2018 fiscal year.

That's a very large number, but 2018 was only the sixth largest annual increase for the U.S. national debt in terms of nominal U.S. dollars. Larger increases were recorded during President Obama's tenure in office in 2012 ($1,276 billion), 2010 ($1,294 billion), 2011 ($1,300 billion), 2009 ($1,413 billion), and 2016 ($1,423 billion).

So it's not an accident that the U.S. national debt has risen to $21.5 trillion, where these six years combined account for 37% of the official U.S. national debt. But to whom does the U.S. government all that money?

The following chart breaks down who the U.S. government's major creditors were at the end of its 2018 fiscal year, which is based on preliminary data that will be revised in upcoming months.

FY 2018: To Whom Does the U.S. Government Owe Money?

According to the U.S. Treasury Department, the U.S. government spent some $779 billion more than it collected in taxes during its 2017 fiscal year. The difference between this figure and the $1,271 billion that the total national debt officially rose can be attributed to the government's net borrowing to fund things like Federal Direct Student Loans, which have combined to account for over $1.2 trillion of the government's $21.5 trillion debt, or 5.7% of the total public debt outstanding since 2010.

Overall, 70% of the U.S. government's total public debt outstanding is held by U.S. individuals and institutions, while 30% is held by foreign entities. For FY2018, China has retained its position as the top foreign holder of U.S. government-issued debt, with directly accounting for 5.7% between institutions on the Chinese mainland and Hong Kong, even though the country has been reducing its holdings of U.S. government-issued debt.

Japan ranks as the second largest foreign holder of the U.S. national debt, with the U.S. owing Japanese institutions 5.4% of its total debt. After that, the European international banking centers of Belgium, Ireland, and Luxembourg combine to account for 3.2% of the U.S. national debt, followed by Brazil at 1.5% and the United Kingdom with 1.3%.

The largest single institution holding U.S. government-issued debt is Social Security's Old Age and Survivors Insurance Trust Fund, which is considered to be an "Intragovernmental" holder of the U.S. national debt, and which holds 13.0% of the nation's total public debt outstanding. The share of the national debt held by Social Security's main trust fund has begun to decline as that government agency cashes out its holdings to pay promised levels of Social Security benefits, where its account is expected to be fully depleted in just 16 years. Under current law, after Social Security's trust fund runs out of money in 2034, all Social Security benefits would be reduced by 23% according to the agency's projections.

The largest single "private" institution that has loaned money to the U.S. government is the U.S. Federal Reserve which, like China, has been reducing its holdings of U.S. government-issued debt. At the end of September 2018, the Fed held just under 11% of the U.S. government's total public debt outstanding. In FY2018, other U.S. institutions such as pension funds and insurance companies have significantly increased their holdings of U.S. government-issued debt as interest rates rose during that year.

Data Sources

U.S. Treasury. The Debt To the Penny and Who Holds It. [Online Application]. 28 September 2018.

Federal Reserve Statistical Release. H.4.1. Factors Affecting Reserve Balances. Release Date: 26 September 2018. [Online Document].

U.S. Treasury. Major Foreign Holders of Treasury Securities. Accessed 15 August 2019.

U.S. Treasury. Monthly Treasury Statement of Receipts and Outlays of the United States Government for Fiscal Year 2018 Through September 30, 2018. [PDF Document].


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August 15, 2019

Can you color every two-dimensional map using just four colors so that no areas that share a common boundary are colored the same?

According to the Four-Color Map Theorem, and a bit of graph theory, the answer is yes, as explained by James Grime in the following video:

The cool thing about the proof is that it matters to more than just the visual presentation of maps in the real world. For instance, if you have a mobile phone network, you can keep the transmission signals from its cell towers from interfering with each other over the regions they overlap using just four sets of frequencies.

But since the theorem was originally conceived in connection to its use on maps, here's the world, in just four colors:

World Map in Four Colors - Source: Wikimedia/Fibonacci

Image Credit: Fibonacci (on Wikimedia) via Creative Commons Attribution-Share Alike 3.0 Unported license.

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August 14, 2019

Not long ago, we looked at foreign ownership of U.S. stocks, which raised a question from our readers: "How much of the world's stocks do U.S. investors own?"

We don't have a specific answer for that question, because the U.S. Treasury Department groups equities, such as stocks, in with debt having a term-to-maturity of one year or longer into the category of long-term securities in its data on the topic, where the question we can answer is "how much of the world's long-term securities do U.S. investors own?"

In the following interactive graphic, we show the answer recorded at the end of June for each year from 2002 through 2018. [If you're accessing this article on a site that republishes our RSS news feed, please click through to access a fully working version on our site, or click this link to see a static image of that chart.]

In the chart, we've compared apples-to-apples as best we can, showing the values of foreign long-term securities owned by U.S.-based investors against the backdrop of the value of U.S. long-term securities held by foreign interests.

Reviewing the history, we see that U.S. holdings of foreign long-term securities as a percent share of foreign holdings of U.S. long-term securities rose from 54% in 2002 to peak at 70% in 2007 before plunging to a low of 54% in 2010. Through 2018, it has recovered to 63% of the value of foreign-held U.S. long-term securities.

References

U.S. Department of the Treasury and Federal Reserve Bank of New York. Foreign Portfolio Holdings of U.S. Securities, as of June 29, 2018. [PDF Document]. 15 May 2019.

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August 13, 2019

Microsoft Excel is a spreadsheet application that was first launched for Apple's MacIntosh computers in 1985 and for personal computers running Microsoft's Windows 2.0 operating system in November 1987.

Separately, we learned from a note tucked in the July 2019 edition of the S&P 500 Market Attributes spreadsheet that its author, Howard Silverblatt, is now in his forty-third year of working at Standard and Poor, where he oversees all the data related to the S&P 500 stock market index.

The S&P 500 itself has been around since 1957, while its predecessor index, the S&P 90, goes back at least to December 1925. Its component stocks have data available that go back even further in time, where we can extend the historical reach of the stocks that made up the S&P 90 and later the S&P 500 all the way back to January 1871.

Which brings us to the S&P 500 Earnings and Estimates spreadsheet, which is also authored by Howard Silverblatt, whose data covering the history of the S&P 500 begins with March 1988, the month ending 1988-Q1.

With so much history, we always wondered why the data provided by S&P for its signature stock market index only went back to March 1988. It wasn't until we learned the history of Microsoft Excel that we finally put two and two together and it all finally made sense. That quarter was likely when Howard started using Excel to analyze the S&P 500!

To mark that realization, and Howard's 43rd year at S&P, we've used the data from that spreadsheet to visualize the quarterly history of the S&p 500 index, from 1988-Q1 through 2019-Q2, covering the index' value, its divisor (the rough equivalent of the number of shares of a regular stock), and its market capitalization, where we multiplied the S&P 500's value by its divisor to generate its market cap history, which is something that Microsoft Excel happens to make easy to do!

S&P 500 Index Value, Divisor, and Market Capitalization, 1988-Q1 - 2019-Q2

How much other, older data is still out there unexplored because it was documented using applications that have been lost to time?

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August 12, 2019

The last two weeks have been especially volatile for the S&P 500 (Index: SPX), where as of the close of trading on Friday, 9 August 2019, our dividend futures-based model describes the level of the S&P 500 as being consistent with investors splitting their forward-looking focus between the future quarters of 2019-Q4 and 2020-Q1.

Alternative Futures - S&P 500 - 2019Q3 - Standard Model - Snapshot on 9 Aug 2019

The primary driver of the market's volatility over that time has been investors shifting their attention back and forth between these two future quarters. Those shifts have themselves been driven by changing investor expectations for the upcoming timing of future Fed rate cuts and the potential resumption of a new round of quantitative easing.

As of Friday, 9 August 2019, here are investor expectations as provided by the CME Group's FedWatch Tool for what the Fed will do with the Federal Funds Rate at its Federal Open Market Committee's upcoming meeting dates:

CME Group FedWatch Tool Probabilities of Federal Funds Rate Changing at Future FOMC Meeting Dates, Snapshot on 09 August 2019

These probabilities indicate investors are expecting three quarter point rate cuts, in 2019-Q3, 2019-Q4, and 2020-Q1, with the most uncertainty around that last future quarter.

Here are the first week of August 2019's market-moving headlines:

Monday, 5 August 2019
Tuesday, 6 August 2019
Wednesday, 7 August 2019
Thursday, 8 August 2019
Friday, 9 August 2019

Elsewhere, Barry Ritholtz put together a short list with an equal number of positives and negatives in the week's economics and market-related news.

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August 9, 2019

PEMDAS, or rather, the mathematical order of operations is in the news!

PEMDAS is an acronym that stands for "Parentheses, Exponents, Multiplication and Division, Addition and Subtraction", for which many math students use the mnemonic "Please Excuse My Dear Aunt Sally" to remember when solving math problems that involve performing multiple operations.

And it has been in the news quite a lot lately. The New York Times (NYSE: NYT) has featured two stories about a viral Twitter post involving it within the last week, not to mention its role in how government officials in the South American nation of Guyana sought to overturn the outcome of a December 2018 no-confidence vote and stay in power by misapplying it but failed, although that latter story is not something any reader who relies on the editorial decisions of the New York Times to learn about what is happening in the world would know much about because the financially troubled newspaper chose to not cover it.

Since they care more about what people talk about on Twitter, let's look at the tweet:


This seemingly simple math problem has become a viral social media phenomenon because it so ambiguously written, it can lead people to one of two results, either 16 or 1, depending on how one interprets how to determine the order in which its arithmetic operations are to be performed. Cornell math professor Steven Strogatz describes this in the second NYT article on the tweet:

The issue was that it generated two different answers, 16 or 1, depending on the order in which the mathematical operations were carried out. As youngsters, math students are drilled in a particular convention for the “order of operations,” which dictates the order thus: parentheses, exponents, multiplication and division (to be treated on equal footing, with ties broken by working from left to right), and addition and subtraction (likewise of equal priority, with ties similarly broken). Strict adherence to this elementary PEMDAS convention, I argued, leads to only one answer: 16.

Nonetheless, many readers (including my editor), equally adherent to what they regarded as the standard order of operations, strenuously insisted the right answer was 1. What was going on? After reading through the many comments on the article, I realized most of these respondents were using a different (and more sophisticated) convention than the elementary PEMDAS convention I had described in the article.

In this more sophisticated convention, which is often used in algebra, implicit multiplication is given higher priority than explicit multiplication or explicit division, in which those operations are written explicitly with symbols like × * / or ÷. Under this more sophisticated convention, the implicit multiplication in 2(2 + 2) is given higher priority than the explicit division in 8÷2(2 + 2). In other words, 2(2+2) should be evaluated first. Doing so yields 8÷2(2 + 2) = 8÷8 = 1. By the same rule, many commenters argued that the expression 8÷2(4) was not synonymous with 8÷2×4, because the parentheses demanded immediate resolution, thus giving 8÷8 = 1 again.

The implicit multiplication in this case may be appropriate because the presence of the parentheses without any intervening arithmetic operator or additional sets of parentheses to clarify otherwise, indicates that the distributive property of multiplication should be applied to this portion of the problem, where the 2 outside the parentheses is part of that grouping within the problem and should be processed along with the math inside the parentheses. To see how that works, let's substitute variables for the numbers in the problem:

a ÷ b(c+d)

For the implicit multiplication, we effectively assume a second set of parentheses contains this portion of the math:

a ÷ (b(c+d))

We would then apply the distributive property of multiplication to obtain the following result, which removes the innermost set of parentheses:

a ÷ (bc+bd)

When we substitute the values for the letters back into this problem and then perform the math inside the parentheses according to the explicit order of operations, we will get 1 as the result.

But should we have to rely on this kind of implicit understanding for processing the math in this problem? Whoever wrote the math presented in this tweet could have saved anyone tasked with doing the math a lot of time and trouble if they had simply included an additional set of parentheses to clarify their intent.

Strogatz makes that exact argument:

Much as we might prefer a clear-cut answer to this question, there isn’t one. You say tomato, I say tomahto. Some spreadsheets and software systems flatly refuse to answer the question — they balk at its garbled structure. That’s my instinct, too, and that of most mathematicians I’ve spoken with. If you want a clearer answer, ask a clearer question.

Would it really be so hard to add additional sets of parentheses or brackets to the problem to better clarify how the order of operations should be applied?



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August 8, 2019

In June 2019, the gap between the pre-trade war trend and the trailing twelve month average of the value of goods exchanged between the U.S. and China expanded to $9.4 billion, a difference of 15.4% from the pre-trade war projection to the recorded level of direct trade between the two nations.

Combined Value of U.S. Exports to China and Imports from China, January 2008 - June 2019

Most of this growing gap may be attributed to the cumulative impact of China's effective boycott on U.S.-produced agricultural goods, which to date, has primarily been achieved through retaliatory tariffs on U.S.-grown crops, such as soybeans. On Monday, 5 August 2019 however, China's leaders confirmed they will fully suspend all new purchases of U.S. agricultural products, tightening their boycott of these goods.

Since the U.S.-China trade war began in March 2018, the cumulative total loss of direct trade between the two nations has grown to $52.8 billion. This figure now exceeds the trailing year average level of U.S.-China trade, which totaled $51.4 billion in June 2019.

References

U.S. Census Bureau. Trade in Goods with China. Accessed 2 August 2019.


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August 7, 2019

July 2019 was a down month for dividend payers in the U.S. stock market. Compared to the previous month, it appears mixed mainly because June is typically among the slowest months of the year for firms declaring dividends. But it pales in comparison to what was recorded a year earlier, in July 2018, with fewer firms raising their cash payouts to shareholders and more firms announcing dividend cuts.

Let's run through the dividend metadata for July 2018....

  • 3,123 U.S. firms declared dividends in July 2019, a decrease of 838 from the 3,961 recorded in June 2019. That figure is also 130 lower than July 2018's total of 3,253.
  • 25 U.S. firms announced they would pay a special (or extra) dividend to their shareholders in July 2019, a decrease of 4 from the number recorded in June 2019 and a an increase of 3 over the total recorded in July 2018.
  • 139 U.S. firms announced they would boost cash dividend payments to shareholders in July 2019, an increase of 69 over the number recorded in June 2019, and a decrease of 35 from the 174 dividend rises declared back in July 2018.
  • A total of 31 publicly traded companies cut their dividends in July 2019, an increase of 17 over the number recorded in June 2019 and also an increase of 8 over the 23 recorded in July 2018.
  • 2 U.S. firms omitted paying their dividends in July 2019, an increase of 1 over the number recorded in June 2019. That figure is also an increase of 2 over the total recorded in July 2018.

The following chart shows the monthly increases and decreases for dividends reported by Standard and Poor for each month from January 2004 through July 2019.

Number of Public U.S. Firms Increasing or Decreasing Their Dividends Each Month, January 2004 through July 2019

We'll take a closer look at which sectors of the economy are feeling distress later this month, when we have a larger sampling from our near real-time sources for dividend declarations. If you would rather not wait, we've linked to our references below....

References

Standard and Poor. S&P Market Attributes Web File. [Excel Spreadsheet]. 31 July 2019.

Seeking Alpha Market Currents. Filtered for Dividends. [Online Database]. Accessed 31 July 2019.

Wall Street Journal. Dividend Declarations. [Online Database]. Accessed 31 July 2019.

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August 6, 2019

Prompted by China's latest escalation of its trade war with the United States, with China's central bank allowing the Chinese yuan to decline in value relative to the U.S. dollar with the apparent blessing of top Chinese government officials, the S&P 500 (Index: SPX) suffered a 2.98% drop on Monday, 5 August 2019, with the index closing the day at $2,844.74.

In doing so, the S&P 500 completed its fourth Lévy flight event of 2019 as investors fully shifted their forward-looking focus from the distant future quarter of 2020-Q1 just a week earlier toward the nearer future quarter of 2019-Q4.

Alternative Futures - S&P 500 - 2019Q3 - Standard Model - Snapshot on 5 August 2019

That large percentage change qualifies the stock market's volatility on Monday, 5 August 2019 as interesting, where we consider an interesting level of volatility as occurring whenever the closing daily value of stock prices changes by more than 2% from the previous trading day's closing value, for statistical reasons.

But with a change in value of nearly 3% from the previous day's close, that represents an even more interesting threshold for "interesting", as that level falls more than three standard deviations outside of the mean day-to-day change recorded in the S&P 500 over every trading day from 3 January 1950 through 5 August 2019, where only 1.4% of all 17,510 trading days recorded during this period have seen similarly large changes from the previous day's closing value, which are roughly equally split between increases and decreases.

S&P 500 Daily Volatility, 3 January 1950 through 5 August 2019

Focusing on just the decreases, there have been just 131 recorded in the more than 69 years from 3 January 1950 through 5 August 2019. We've recorded the data for each the S&P 500's worst ever one day declines recorded during the modern era of the U.S. stock market in the following dynamic table, where you can click the column headings for Date, Open, High, Low, Close, and Percent Change from Previous Close, you can sort the data from either high-to-low, or from low-to high. If you're accessing this article from a site that republishes our RSS news feed, please click through to our site to access a working version of the dynamic table.

Worst 131 Single Day Declines in S&P 500 During Modern Era for U.S. Stock Market
Date Previous Day's
Close
Open High Low Close Percent Change
from Previous Close
1950-06-26 $19.14 $18.11 $18.11 $18.11 $18.11 -5.38%
1950-06-29 $18.11 $17.44 $17.44 $17.44 $17.44 -3.70%
1950-11-28 $20.18 $19.56 $19.56 $19.56 $19.56 -3.07%
1950-12-04 $19.66 $19.00 $19.00 $19.00 $19.00 -3.36%
1953-02-09 $26.51 $25.69 $25.69 $25.69 $25.69 -3.09%
1955-09-26 $45.63 $42.61 $42.61 $42.61 $42.61 -6.62%
1955-10-10 $42.38 $41.15 $41.15 $41.15 $41.15 -2.90%
1957-10-21 $40.33 $39.15 $39.15 $39.15 $39.15 -2.93%
1961-04-18 $68.68 $66.20 $66.20 $66.20 $66.20 -3.61%
1962-05-28 $59.47 $59.15 $59.15 $55.42 $55.50 -6.68%
1962-06-04 $59.38 $59.12 $59.12 $57.14 $57.27 -3.55%
1973-11-19 $103.88 $103.65 $103.65 $100.37 $100.71 -3.05%
1973-11-26 $99.44 $98.64 $98.64 $95.79 $96.58 -2.88%
1974-07-08 $83.66 $83.13 $83.13 $80.48 $81.09 -3.07%
1974-10-23 $73.13 $72.81 $72.81 $70.40 $71.03 -2.87%
1974-11-18 $71.91 $71.10 $71.10 $68.95 $69.27 -3.67%
1979-10-09 $109.88 $109.43 $109.43 $106.04 $106.63 -2.96%
1980-03-17 $105.43 $105.23 $105.23 $101.82 $102.26 -3.01%
1980-03-24 $102.31 $102.18 $102.18 $98.88 $99.28 -2.96%
1981-08-24 $129.23 $128.59 $128.59 $125.02 $125.50 -2.89%
1982-10-25 $138.83 $138.81 $138.81 $133.32 $133.32 -3.97%
1986-07-07 $251.79 $251.79 $251.81 $243.63 $244.05 -3.07%
1986-09-11 $247.06 $247.06 $247.06 $234.67 $235.18 -4.81%
1987-10-14 $314.52 $314.52 $314.52 $304.78 $305.23 -2.95%
1987-10-16 $298.08 $298.08 $298.92 $281.52 $282.70 -5.16%
1987-10-19 $282.70 $282.70 $282.70 $224.83 $224.84 -20.47%
1987-10-22 $258.38 $258.24 $258.38 $242.99 $248.25 -3.92%
1987-10-26 $248.22 $248.20 $248.22 $227.26 $227.67 -8.28%
1987-11-09 $250.41 $250.41 $250.41 $243.01 $243.17 -2.89%
1987-11-30 $240.34 $240.27 $240.34 $225.75 $230.30 -4.18%
1987-12-03 $233.45 $233.46 $233.90 $225.21 $225.21 -3.53%
1988-01-08 $261.07 $261.05 $261.07 $242.95 $243.40 -6.77%
1988-04-14 $271.58 $271.55 $271.57 $259.37 $259.75 -4.36%
1989-10-13 $355.39 $355.39 $355.53 $332.81 $333.65 -6.12%
1990-08-06 $344.86 $344.86 $344.86 $333.27 $334.43 -3.02%
1990-08-23 $316.55 $316.55 $316.55 $306.56 $307.06 -3.00%
1991-11-15 $397.15 $397.15 $397.16 $382.62 $382.62 -3.66%
1996-03-08 $653.65 $653.65 $653.65 $627.63 $633.50 -3.08%
1997-10-27 $941.64 $941.64 $941.64 $876.73 $876.99 -6.87%
1998-01-09 $956.05 $956.05 $956.05 $921.72 $927.69 -2.97%
1998-08-04 $1,112.44 $1,112.44 $1,119.73 $1,071.82 $1,072.12 -3.62%
1998-08-27 $1,084.19 $1,084.19 $1,084.19 $1,037.61 $1,042.59 -3.84%
1998-08-31 $1,027.14 $1,027.14 $1,033.47 $957.28 $957.28 -6.80%
1998-09-30 $1,049.02 $1,049.02 $1,049.02 $1,015.73 $1,017.01 -3.05%
1998-10-01 $1,017.01 $1,017.01 $1,017.01 $981.29 $986.39 -3.01%
2000-01-04 $1,455.22 $1,455.22 $1,455.22 $1,397.43 $1,399.42 -3.83%
2000-02-18 $1,388.26 $1,388.26 $1,388.59 $1,345.32 $1,346.09 -3.04%
2000-04-14 $1,440.51 $1,440.51 $1,440.51 $1,339.40 $1,356.56 -5.83%
2000-12-20 $1,305.60 $1,305.60 $1,305.60 $1,261.16 $1,264.74 -3.13%
2001-03-12 $1,233.42 $1,233.42 $1,233.42 $1,176.78 $1,180.16 -4.32%
2001-04-03 $1,145.87 $1,145.87 $1,145.87 $1,100.19 $1,106.46 -3.44%
2001-09-17 $1,092.54 $1,092.54 $1,092.54 $1,037.46 $1,038.77 -4.92%
2001-09-20 $1,016.10 $1,016.10 $1,016.10 $984.49 $984.54 -3.11%
2002-01-29 $1,133.06 $1,133.06 $1,137.47 $1,098.74 $1,100.64 -2.86%
2002-07-10 $952.83 $952.83 $956.34 $920.29 $920.47 -3.40%
2002-07-19 $881.56 $881.56 $881.56 $842.07 $847.75 -3.84%
2002-07-22 $847.75 $847.76 $854.13 $813.26 $819.85 -3.29%
2002-08-01 $911.62 $911.62 $911.62 $882.48 $884.66 -2.96%
2002-08-05 $864.24 $864.24 $864.24 $833.44 $834.60 -3.43%
2002-09-03 $916.07 $916.07 $916.07 $877.51 $878.02 -4.15%
2002-09-19 $869.46 $869.46 $869.46 $843.09 $843.32 -3.01%
2002-09-27 $854.95 $854.95 $854.95 $826.84 $827.37 -3.23%
2003-01-24 $887.34 $887.34 $887.34 $859.71 $861.40 -2.92%
2003-03-24 $895.79 $895.79 $895.79 $862.02 $864.23 -3.52%
2007-02-27 $1,449.37 $1,449.25 $1,449.25 $1,389.42 $1,399.04 -3.47%
2007-08-09 $1,497.49 $1,497.21 $1,497.21 $1,453.09 $1,453.09 -2.96%
2007-11-07 $1,520.27 $1,515.46 $1,515.46 $1,475.04 $1,475.62 -2.94%
2008-01-17 $1,373.20 $1,374.79 $1,377.72 $1,330.67 $1,333.25 -2.91%
2008-02-05 $1,380.82 $1,380.28 $1,380.28 $1,336.64 $1,336.64 -3.20%
2008-06-06 $1,404.05 $1,400.06 $1,400.06 $1,359.90 $1,360.68 -3.09%
2008-06-26 $1,321.97 $1,316.29 $1,316.29 $1,283.15 $1,283.15 -2.94%
2008-09-04 $1,274.98 $1,271.80 $1,271.80 $1,232.83 $1,236.83 -2.99%
2008-09-09 $1,267.79 $1,267.98 $1,268.66 $1,224.51 $1,224.51 -3.41%
2008-09-15 $1,251.70 $1,250.92 $1,250.92 $1,192.70 $1,192.70 -4.71%
2008-09-17 $1,213.60 $1,210.34 $1,210.34 $1,155.88 $1,156.39 -4.71%
2008-09-22 $1,255.08 $1,255.37 $1,255.37 $1,205.61 $1,207.09 -3.82%
2008-09-29 $1,213.27 $1,209.07 $1,209.07 $1,106.42 $1,106.42 -8.81%
2008-10-02 $1,161.06 $1,160.64 $1,160.64 $1,111.43 $1,114.28 -4.03%
2008-10-06 $1,099.23 $1,097.56 $1,097.56 $1,007.97 $1,056.89 -3.85%
2008-10-07 $1,056.89 $1,057.60 $1,072.91 $996.23 $996.23 -5.74%
2008-10-09 $984.94 $988.42 $1,005.25 $909.19 $909.92 -7.62%
2008-10-15 $998.01 $994.60 $994.60 $903.99 $907.84 -9.03%
2008-10-21 $985.40 $980.40 $985.44 $952.47 $955.05 -3.08%
2008-10-22 $955.05 $951.67 $951.67 $875.81 $896.78 -6.10%
2008-10-24 $908.11 $895.22 $896.30 $852.85 $876.77 -3.45%
2008-10-27 $876.77 $874.28 $893.78 $846.75 $848.92 -3.18%
2008-11-05 $1,005.75 $1,001.84 $1,001.84 $949.86 $952.77 -5.27%
2008-11-06 $952.77 $952.40 $952.40 $899.73 $904.88 -5.03%
2008-11-12 $898.95 $893.39 $893.39 $850.48 $852.30 -5.19%
2008-11-14 $911.29 $904.36 $916.88 $869.88 $873.29 -4.17%
2008-11-19 $859.12 $859.03 $864.57 $806.18 $806.58 -6.12%
2008-11-20 $806.58 $805.87 $820.52 $747.78 $752.44 -6.71%
2008-12-01 $896.24 $888.61 $888.61 $815.69 $816.21 -8.93%
2008-12-04 $870.74 $869.75 $875.60 $833.60 $845.22 -2.93%
2008-12-11 $899.24 $898.35 $904.63 $868.73 $873.59 -2.85%
2009-01-07 $934.70 $927.45 $927.45 $902.37 $906.65 -3.00%
2009-01-14 $871.79 $867.28 $867.28 $836.93 $842.62 -3.35%
2009-01-20 $850.12 $849.64 $849.64 $804.47 $805.22 -5.28%
2009-01-29 $874.09 $868.89 $868.89 $844.15 $845.14 -3.31%
2009-02-10 $869.89 $866.87 $868.05 $822.99 $827.16 -4.91%
2009-02-17 $826.84 $818.61 $818.61 $789.17 $789.17 -4.56%
2009-02-23 $770.05 $773.25 $777.85 $742.37 $743.33 -3.47%
2009-03-02 $735.09 $729.57 $729.57 $699.70 $700.82 -4.66%
2009-03-05 $712.87 $708.27 $708.27 $677.93 $682.55 -4.25%
2009-03-30 $815.94 $809.07 $809.07 $779.81 $787.53 -3.48%
2009-04-20 $869.60 $868.27 $868.27 $832.39 $832.39 -4.28%
2009-06-22 $921.23 $918.13 $918.13 $893.04 $893.04 -3.06%
2009-07-02 $923.33 $921.24 $921.24 $896.42 $896.42 -2.91%
2010-02-04 $1,097.28 $1,097.25 $1,097.25 $1,062.78 $1,063.11 -3.11%
2010-05-06 $1,165.87 $1,164.38 $1,167.58 $1,065.79 $1,128.15 -3.24%
2010-05-20 $1,115.05 $1,107.34 $1,107.34 $1,071.58 $1,071.59 -3.90%
2010-06-04 $1,102.83 $1,098.43 $1,098.43 $1,060.50 $1,064.88 -3.44%
2010-06-29 $1,074.57 $1,071.10 $1,071.10 $1,035.18 $1,041.24 -3.10%
2010-07-16 $1,096.48 $1,093.85 $1,093.85 $1,063.32 $1,064.88 -2.88%
2011-08-04 $1,260.34 $1,260.23 $1,260.23 $1,199.54 $1,200.07 -4.78%
2011-08-08 $1,199.38 $1,198.48 $1,198.48 $1,119.28 $1,119.46 -6.66%
2011-08-10 $1,172.53 $1,171.77 $1,171.77 $1,118.01 $1,120.76 -4.42%
2011-08-18 $1,193.89 $1,189.62 $1,189.62 $1,131.03 $1,140.65 -4.46%
2011-09-21 $1,202.09 $1,203.63 $1,206.30 $1,166.21 $1,166.76 -2.94%
2011-09-22 $1,166.76 $1,164.55 $1,164.55 $1,114.22 $1,129.56 -3.19%
2011-11-09 $1,275.92 $1,275.18 $1,275.18 $1,226.64 $1,229.10 -3.67%
2015-08-21 $2,035.73 $2,034.08 $2,034.08 $1,970.89 $1,970.89 -3.19%
2015-08-24 $1,970.89 $1,965.15 $1,965.15 $1,867.01 $1,893.21 -3.94%
2015-09-01 $1,972.18 $1,970.09 $1,970.09 $1,903.07 $1,913.85 -2.96%
2016-06-24 $2,113.32 $2,103.81 $2,103.81 $2,032.57 $2,037.41 -3.59%
2018-02-05 $2,762.13 $2,741.06 $2,763.39 $2,638.17 $2,648.94 -4.10%
2018-02-08 $2,681.66 $2,685.01 $2,685.27 $2,580.56 $2,581.00 -3.75%
2018-10-10 $2,880.34 $2,873.90 $2,874.02 $2,784.86 $2,785.68 -3.29%
2018-10-24 $2,740.69 $2,737.87 $2,742.59 $2,651.89 $2,656.10 -3.09%
2018-12-04 $2,790.37 $2,782.43 $2,785.93 $2,697.18 $2,700.06 -3.24%
2019-08-05 $2,932.05 $2,898.07 $2,898.07 $2,822.12 $2,844.74 -2.98%

The nearly 3% drop in the S&P 500's value on Monday, 5 August 2019 pales in comparison to the worst ever single day decline of 20.47% that was recorded back on Monday, 19 October 1987, which earned that day the title of "Black Monday", the single worst day ever recorded in U.S. stock market history.

Note that many of these relatively rare large one-day declines have tended to be clustered together in time. Whether that happens now in 2019 will depend on the flow of new information that might cause investors to shift their attention to other points of time in the future, where an additional 3% drop from its current level would coincide with investors shifting their attention to the current quarter of 2019-Q3. And as you can see from our first chart, any news that might fix the attention of investors on 2020-Q2 would coincide with a much, much larger crash in stock prices.

That assumes, of course, that there is no erosion in the expectations in the S&P 500's dividends per share at these future points of time, which would amplify the indicated potential declines.

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