The S&P 500 (Index: SPX) started the trading week strong, reaching a record high close of 4,384.63 on Monday, 12 July 2021 before losing steam and retreating through much of the rest of the week. The index closed the week at 4,327.16.
That's generally consistent with the dividend futures-based model's projections for investors focusing their attention on 2022-Q1 in setting current day stock prices.
While the model looks forward to a sideways to slowing rising run over the next several weeks if investors keep their focus on 2022-Q1, it also indicates the risk of a 5% decline should investors have reason to shift their attention back to the current quarter of 2021-Q3.
Whether that happens will depend much on what happens with the outlook for inflation in the U.S. economy, which continues to play an outsized role in the news influencing investors' expectations.
- Monday, 12 July 2021
- Signs and portents for the U.S. economy:
- U.S. consumers' short-term inflation outlook jumps, NY Fed survey shows
- Oil prices slip as economic fears offset tightening crude supplies
- Bigger inflation developing all over:
- Bigger trouble developing in Australia, Thailand:
- Australian banks must have a plan to deal with negative interest rates by 2022 - APRA
- Thai economy may miss forecasts as COVID-19 cases spike - central bank
- ECB minions plan to figure out what they're doing soon:
- ECB to discuss new guidance after inflation target tweak -Vice President
- ECB to chart new policy path next week
- Tesla lifts S&P 500 to record highs
- Tuesday, 13 July 2021
- Signs and portents for the U.S. economy:
- U.S. consumer prices post largest gain in 13 years; inflation has likely peaked
- U.S. fed funds, eurodollar futures raise rate hike bets after CPI data
- Conagra tamps down full-year profit expectations as input costs soar
- Oil rises nearly 2% as investors size up tight market
- Fed minion talks about tapering stimulus bond buys sooner rather than later with hot inflation, investors want to hear from Powell:
- Fed's Bullard says time is right to reduce central bank's bond buying - WSJ
- Analysis: Investors pivot to Powell after more hot U.S. inflation data
- ECB minions want to keep stimulus going, need to figure out what they mean by tolerance for higher inflation:
- 'Persistent' ECB won't tighten too early, Lagarde says
- ECB's new guidance must show there is leeway on inflation -Centeno
- S&P 500 and Nasdaq end down after hitting record highs
- Wednesday, 14 July 2021
- Signs and portents for the U.S. economy:
- Biggest U.S. banks smash profit estimates as economy revives
- Port of Los Angles sets new volume record for June
- Fed minion looking like will keep job, wants to keep stimulus bond buy pump going, thinks inflation will go away:
- Seven months and ticking, the case for keeping Powell as Fed chair builds
- Job gains strong, prices rising as U.S. recovery continues -Fed Beige Book
- Fed's Powell tamps down taper talk but feels inflation heat on the Hill
- ECB minions want to keep stimulus going longer:
- S&P 500 ends higher after Powell lulls market
- Thursday, 15 July 2021
- Signs and portents for the U.S. economy:
- NY Fed Empire State business conditions index surges to record 43.0 in July vs 17.4 in June
- Amazing what finally lifting a lockdown can do….
- U.S. import prices rise solidly in June
- U.S. weekly jobless claims at 16-month low; shortages hamper manufacturing
- Fed minion gets grilled about inflation:
- Bigger inflation developing all over:
- Bigger trouble developing in and around China:
- ECB minions want to keep stimulus going longer:
- Nasdaq ends lower as investors sell Big Tech
- Friday, 16 July 2021
- Signs and portents for the U.S. economy:
- BofA lowers U.S. 2021 GDP forecast to 6.5% from 7.0%
- Cash-flush Americans lift U.S. retail sales; shortages depress auto purchases
- U.S. consumer sentiment drops in early July on inflation fears
- Fed minion likely to keep job:
- ECB minions to talk about future of stimulus policies, have less inflation than expected:
- ECB policymakers set for showdown on policy path
- Euro zone inflation easing confirmed, trade surplus dips
- Wall Street ends down as Delta variant drives fears
Looking for additional markets and economics news? Check out Abnormal Returns, in which Tadas Viskanta provides a daily roundup of links to interesting news and analysis.