The S&P 500 (Index: SPX) closed at a new record high of 4,472.94 on Monday, 16 August 2021, retreated on Tuesday and Wednesday, then rebounded somewhat to close at 4,441.67 on Friday, 20 August 2021.
All in all, that puts the level of the S&P 500 just a bit below where the dividend futures-based model would set it for investors focusing on either 2021-Q4 or 2022-Q1 in setting current day stock prices.
We're emphasizing both these future quarter because the stock market underwent something akin to a minor Lévy flight event, which occurred as investors shifted at least a portion of their forward-looking focus inward from 2022-Q1 toward 2021-Q4. That shift was prompted by changing expectations for when the Federal Reserve might start tapering its stimulus bond buys. But it wasn't a major shift because there's not much difference between the expectations for changes in the growth rate of dividends for these upcoming future quarters, which is why stock prices did not change more than they did.
Looking ahead, the Federal Reserve's annual summer Jackson Hole meetings will take place (virtually) in this upcoming week. New information coming out from that event may have a larger impact on stock prices, particularly as it might provide a more firm expecation of when the Fed will start following through on its desire to start tapering its pandemic stimulus policies.
But when looking backward to the past week, there wasn't much market moving news for investors to use to set their outlooks for the months ahead. The headlines below attest to the relative quiet ahead of the Fed's Jackson Hole meetings.
- Monday, 16 August 2021
- Signs and portents for the U.S. economy:
- N.Y. Fed's factory gauge softens on slower shipments, order growth
- Oil pares loses as OPEC+ sees no need for more supply hikes
- Former Fed minions think higher inflation = more jobs:
- Bigger trouble, stimulus developing in China:
- BOE minions put rate hike on hold until 2023:
- Bank of England to wait until 2023 before raising rates: Reuters poll
- S&P 500, Dow hit record highs as defensive shares shine
- Tuesday, 17 August 2021
- Signs and portents for the U.S. economy:
- Delta, beef prices threaten to take the sizzle out of U.S. steakhouses
- U.S. manufacturing production accelerates on autos in July
- U.S. business inventories rise solidly in June
- U.S. homebuilder confidence falls to 13-month low in August
- Automobile shortages, spending shift to services tank U.S. retail sales
- Dovish Fed minion looks for slow stimulus bond buys in 2021-Q4 or 2022-Q1, chief minion not impressed by Delta COVID strain:
- Fed's Kashkari: 'Reasonable' to taper late this year or early next
- Fed's Powell: Not certain Delta outbreak will dent recovery
- Eurozone saw net positive economic growth in 2021-Q2:
- Wall Street slumps after weak retail sales, Home Depot results
- Wednesday, 18 August 2021
- Signs and portents for the U.S. economy:
- U.S. mortgage applications drop as mortgage rates edge above 3% -MBA
- U.S. homebuilding stumbles amid unrelenting supply constraints
- U.S. employment growth through March revised modestly lower
- Oil skids for fifth day on COVID surge, worries about more supply
- Most Fed minions want to start slowing stimulus bond buys before end of 2021, one fears getting inflation wrong:
- Minutes reveal a Fed split over job market, bond-buying taper
- Bullard: Misreading inflation could require "very disruptive" rate hikes - MarketWatch
- Wall Street slides after Fed minutes show split over jobs, taper
- Thursday, 19 August 2021
- Signs and portents for the U.S. economy:
- U.S. second-quarter growth likely to be revised higher after slew of strong data
- U.S. weekly jobless claims hit 17-month low; ranks of unemployed shrinking
- U.S. lets states use federal pandemic funds to extend jobless aid
- Philly Fed factory index falls in July to lowest since December
- Bigger inflation developing all over:
- Australia's red-hot housing to get hotter, affordability to worsen - Reuters poll
- New Zealand house price 'madness' to leave affordability stretched for years: Reuters poll
- S&P 500 ends with slim gain as tech strength offsets cyclical woes
- Friday, 20 August 2021
- Signs and portents for the U.S. economy:
- Oil posts biggest week of losses in nine months as Delta variant spreads
- Fed minions paying attention to COVID trends, getting set for annual shindig in Jackson Hole:
- Fed's Kaplan watching Delta variant, says he may need to adjust view
- Take Five: The Jackson Hole Jamboree
- Bigger trouble developing in China:
- Half a trillion dollars wiped from China markets in a week as clampdowns shatter confidence
- Wall Street rallies as Fed jitters wane, but ends down for the week
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