Unexpectedly Intriguing!
November 11, 2019

The S&P 500 (Index: SPX) continued setting new highs in the first full week of November 2019, buoyed by positive changes in the outlook for dividends and earnings for the component companies that make up the index, which ended the week at an all-time-high closing value of 3,093.08.

We're nearing the end of the period to which our impromptu redzone forecast applies, where the trajectory of the S&P 500 appears to be converging with the expectations associated with the alternate trajectory for 2020-Q3, indicating that investors are focusing their attention on that distant future quarter.

Alternative Futures - S&P 500 - 2019Q4 - Standard Model - Snapshot on 8 Nov 2019

That makes sense because this future quarter has seen the greatest change in the outlook for its dividends during the last three weeks. Meanwhile, the prospects for the Fed taking action in this quarter to cut the Federal Funds Rate dropped back below the 50% mark in the last week, with the latest probabilities of rate changes at various upcoming Fed meeting dates from the CME Group's FedWatch Tool suggesting that investors are leaning against any rate changes in 2020.

CME Group FedWatch Tool Probabilities of Federal Funds Rate Changing at Future FOMC Meeting Dates, Snapshot on 08 November 2019

Investor expectations have changed by quite a wide margin during the past several weeks. Here is some of the new information that investors absorbed into their expectations from the past week:

Monday, 4 November 2019
Tuesday, 5 November 2019
Wednesday, 6 November 2019
Thursday, 7 November 2019
Friday, 8 November 2019

Over at The Big Picture, Barry Ritholtz outlines the positives and negatives he found hidden among the past week's economics and market-related news.

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