Unexpectedly Intriguing!
18 November 2019

The S&P 500 (Index: SPX) marked its third consecutive week of closing at new record high values, ending Friday, 15 November 2019 at 3,120.46, with health care stocks providing the upward momentum to close out the second full week of November 2019.

Overall, the level of the S&P 500 looks like its running a bit hot compared to where our dividend futures-based model, but since it's projecting a rising trend over the next week, it could be described as simply being slightly ahead of itself.

Alternative Futures - S&P 500 - 2019Q4 - Standard Model - Snapshot on 15 Nov 2019

The level of the S&P 500 is generally consistent with investors either focusing ahead on either 2020-Q1 or 2020-Q3 in setting stock prices, although we think 2020-Q3 is the current focus because the projected future dividends expected in that quarter has been rising over the last several weeks.

Meanwhile, there's the ever present concern about what the Federal Reserve might do with setting the basic interest rate it controls. On that count, the CME Group's FedWatch Tool is projecting the investor expectation that the Fed will cut rates by a quarter point during 2020-Q4, but it wouldn't take much to shift the probabilities of such a rate change earlier by a quarter, so 2020-Q3 will very much continue to be a forward-looking focal point for investors.

CME Group FedWatch Tool Probabilities of Federal Funds Rate Changing at Future FOMC Meeting Dates, Snapshot on 15 November 2019

Meanwhile, the flow of new information offered little in the way of negativity for the U.S. stock market during the second week of November 2019. Here are the more significant headlines we flagged during the week that was:

Monday, 11 November 2019
Tuesday, 12 November 2019
Wednesday, 13 November 2019
Thursday, 14 November 2019
Friday, 15 November 2019

Barry Ritholtz succinctly summarized the positives and negatives he found in last week's economics and market-related news, where the #1 positive is that the market keeps doing the most bullish thing it can do: keep making new highs!

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