Unexpectedly Intriguing!
27 April 2020

The S&P 500 (Index: SPX) continues to defy gravity in the upside down market the Fed has wrought, closing the trading week ending on 24 April 2020 at 2,836.74, 599.34 points (21.1%) above its 23 March 2020 coronavirus recession low, and 549.10 points (16.2%) below its 19 February 2020 pre-coronavirus recession high, giving an indication of the extreme volatility that has characterized the stock market during the last two months.

The alternative futures forecast chart shows the level of the S&P 500 is consistent with an amplification factor m in the dividend futures-based model being equal to -1 following the Fed's last action to backstop the liquidity of the commercial bond market.

Alternative Futures - S&P 500 - 2020Q1 and 2020Q2 - Standard Model - Snapshot on 24 Apr 2020

Dividend futures have also been rebounding, which in today's upside down market, means that the expected future level of the S&P 500's quarterly dividends per share won't be as low as they were projected a month ago when the market hit bottom.

Past and Projected Quarterly Dividends Futures for the S&P 500, 2019-Q2 through 2021-Q2, Snapshot on  24 April 2020

Here's the wrap-up of the market-moving news headlines we tracked during the past week.

Monday, 20 April 2020
Tuesday, 21 April 2020
Wednesday, 22 April 2020
Thursday, 23 April 2020
Friday, 24 April 2020

But wait, there's more! Barry Ritholtz listed the positive and negative news he picked out of the week's news stream to provide a bigger picture than what we've presented!

Unlike the weeks preceding it, the trading week ending on Friday, 24 April 2020 was relatively subdued. So much so that unless we see daily volatility rise to an interesting level, which we define as a greater than 2% change in either direction from the previous day's closing value, we'll discontinue appending daily updates throughout the week to this article. If the market should change by more that 2% from one day to the next in the trading week ending Friday, 1 May 2020, please follow this link for our unscheduled 'below the line' coverage the following morning.

S&P 500 Rises 2.7% As The Fed Works Its Mojo

Update 29 April 2020, 6:30 PM Eastern: The S&P 500 (Index: SPX) climbed 2.7% to close at 2,939.51 as all eyes were on the Fed and what signal it would send for providing relief for coronavirus-stricken markets.

And they signal they sent was that the Fed will be "committed to using every tool", which is to say they are going to continue doing what they have been doing, and more of it.

In addition to sending stock prices higher, that message also sent dividend futures higher. Here are the latest versions of the S&P 500's dividend futures and the alternative futures chart, where we find the trajectory of the S&P 500 is following the new upside-down order the Fed has created in the stock market.

Past and Projected Quarterly Dividends Futures for the S&P 500, 2019-Q2 through 2021-Q2, Snapshot on 26 April 2020
Alternative Futures - S&P 500 - 2020Q1 and 2020Q2 - Standard Model - Snapshot on 26 April 2020

In other news, the coronavirus recession crashed U.S. GDP by at least 4.2% in the first quarter, with virtually all of it in March 2020, and U.S. firms are cutting or suspending dividend payments at never-before-seen rates. How long do you suppose the Fed will need to keep working its monetary mojo?

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