Unexpectedly Intriguing!
November 2, 2020

As if 2020 wasn't crazy enough already, the S&P 500 (Index: SPX) experienced a new Lévy flight event on 28 October 2020, sending the index down 3.5% for the day as investors suddenly shifted their forward looking focus from 2020-Q4 toward the more distant future quarter of 2021-Q1. Overall, the index ended the final trading week of October 2020 some 5.6% lower than the previous week, ending the month at 3,269.96.

Since we've already covered that event as an update to the previous entry in the S&P 500 chaos series, let's update that update through Friday, 30 October 2020 by noting that investors have continued focusing on 2021-Q1 in setting current day stock prices.

Alternative Futures - S&P 500 - 2020Q4 - Standard Model (m=+1.5 from 22 September 2020) - Snapshot on 30 Oct 2020

With the outcome of the 3 November 2020 having the potential to greatly affect the expectations for future dividends, here is the latest snapshot of those expectations:

Past and Projected Quarterly Dividends Futures for the S&P 500, 2019-Q4 through 2021-Q4, Snapshot on  30 October 2020

Finally, here's a sampling of the random onset of new information that investors absorbed in the final week of October 2020.

Monday, 26 October 2020
Tuesday, 27 October 2020
Wednesday, 28 October 2020
Thursday, 29 October 2020
Friday, 30 October 2020

Elsewhere, Barry Ritholtz lists 8 positives and 8 negatives he found in the past week's economics and markets news.


Update 5 November 2020: Our headline for next week could be "Second Lévy Flight Event Boosts S&P 500 After Election". It's taken just two days for investors to fully shift their focus from 2021-Q1 back into 2020-Q4 in the aftermath of the 3 November 2020 election, thanks largely to the failure of the Democratic party to deliver a 'blue wave' election result that would ensure their promised tax hikes on corporate and investor income. Here's the updated alternative futures chart showing the shift in the level of the S&P 500 corresponding to that change in the future time horizon for investors:

Alternative Futures - S&P 500 - 2020Q4 - Standard Model (m=+1.5 from 22 September 2020) - Snapshot on 5 Nov 2020

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