The S&P 500 (Index: SPX) closed out the second week of November 2020 by climbing 1.4% to reach 3,585.15 on Friday, 13 November 2020, a new recordhigh for the index.
From our perspective, the move comes as part of the third Lévy flight event of the last three weeks, as investors would appear to be the completion of a shift in their forward looking focus beyond the current quarter of 2020-Q4 toward the more distant future quarter of 2021-Q3.
The latest update to the alternative futures chart shows that change and also an upward shift in the potential future trajectories the S&P 500 might take depending upon how far into the future investors fix their forward-looking attention.
We think this latest shift in the time horizon of investors coincides with the positive news of the effectiveness of a COVID-19 vaccine in its Phase 3 testing. Developed by Pfizer (NYSE: PFE), some 100 million doses for Americans would be funded by the Trump administration's Warp Speed initiative for accelerating the distribution of newly developed, effective COVID vaccines in 2021.
The news also boosted expectations for dividends through all quarters extending out in the foreseeable future, with the largest positive changes seen in future quarters through 2021-Q3. The following animated chart shows the change in the expected future for the S&P 500's dividends on Monday, 9 November 2020 after the news first broke. [Please click here to access the chart on our site if you're accessing this article on a site that republishes our RSS news feed.]
Here's a recap of the week's market moving headlines.
- Monday, 9 November 2020
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- Daily signs and portents for the U.S. economy:
- Oil soars 8% on promising COVID-19 vaccine results
- EU 'regrettably' hits U.S. with tariffs, seeks better Biden ties
- Fed minions share gloomy outlook:
- U.S. still faces possible default wave, asset declines due to pandemic: Fed
- Fed's Mester says all emergency lending facilities should be extended
- Fed's Quarles sees formidable, complex challenge ahead
- Fed's Kaplan sees downside risk from virus resurgence
- Bigger trouble developing in Eurozone:
- Wall Street rallies on coronavirus vaccine trial results
- Change in outlook: JPMorgan sees S&P 500 surging to 4,000 points in early-2021
- Tuesday, 10 November 2020
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- Daily signs and portents for the U.S. economy:
- Oil gains nearly 3% on vaccine hopes, even as nations reimpose lockdowns
- Senate's McConnell backs smaller coronavirus relief bill, omnibus appropriations bill by year's end
- Fed minions say their monetary policy is fine, want more government spending:
- Fed's Kaplan concerned about next six months as virus surges
- Fed's George says growth to moderate, policy appropriate
- Fed policy is in a really good place, Daly says
- Fed's Rosengren says fiscal aid should include help for state and local governments
- Bigger stimulus developing in Japan:
- Bigger trouble developing in Eurozone:
- ECB minion would really like more government spending:
- S&P 500 dips, Nasdaq sinks as investors adjust bets on recovery hopes
- Wednesday, 11 November 2020
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- Daily signs and portents for the U.S. economy:
- Brent touches $45/bbl on vaccine hopes and U.S. crude drawdown
- Senate's McConnell backs smaller coronavirus relief bill, omnibus appropriations bill by year's end
- Fed minions indicate they want targeted government spending, not more helicopter money:
- Nasdaq closes higher with technology stocks back in favor
- Thursday, 12 November 2020
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- Daily signs and portents for the U.S. economy:
- Oil falls on coronavirus surge, unexpected U.S. crude stockpile rise
- Congressional COVID-19 impasse drags on, Pelosi warns 'house is burning down'
- U.S. data suggests economic recovery may be weakening
- U.S. labor market gradually healing; inflation still benign
- Fed, ECB minions demonstrate ability to grasp the obvious:
- Fed Chair Powell says next months could be 'challenging'
- Fed, ECB heads give COVID-19 vaccine cautious welcome
- Bigger trouble developing in Eurozone, sooner than expected:
- Wall Street ends sharply lower as pandemic fears resurge
- Friday, 13 November 2020
-
- Daily signs and portents for the U.S. economy:
- Oil falls on rising Libya output, coronavirus surge
- U.S. vehicle travel fell 8.6% in Sept; lowest drop since pandemic start
- Fed officials differ over economy's risks as coronavirus surges
- NY Fed's Williams: U.S. economy still in 'deep hole' and rising infections pose risk
- Fed's Harker says U.S. economy is not going to 'snap right back'
- Bullard: 'Household level' virus spread may require new 'education initiative'
- Fed moves closer to joining global peers in climate-change fight
- Bigger trouble developing in the Eurozone:
- German economy taking hit from lockdown measures in November: ministry
- Euro zone third-quarter GDP quarter-on-quarter surge revised marginally down
- ECB minions cautious on vaccine, rethinking inflation target:
- ECB policymakers cautious despite vaccine progress
- ECB to discuss new inflation target next week: Rehn
- S&P boasts record close with earnings reports adding to vaccine fueled optimism
Elsewhere, Barry Ritholtz lists all the positives and negatives he found in the past week's economics and markets news.
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