Unexpectedly Intriguing!
06 February 2023

On Friday, 3 February 2023, an unexpectedly large upward adjustment to the number of employed Americans in the January 2023 employment situation report prompted investors to reset their expectations for how high the Fed's rate hikes will go before peaking. Before the report was issued, investors were looking for the Fed's rate hikes to top out in the 4.75%-5.00% range in March 2023. After the report, their expectations changed to anticipate a peak target rate range of 5.00%-5.25% being hit in May 2023.

In response, the trajectory of the S&P 500 (Index: SPX) shifted downward to close the week at 4,136.48, which was still up from the previous week's close. That's not unexpected, because the index has been running on the high side of the redzone forecast range in the dividend futures-based model's alternative futures chart:

Alternative Futures - S&P 500 - 2023Q1 - Standard Model (m=+2.0 from 13 September 2022) - Snapshot on 3 Feb 2023

The week also saw continued improvement in the expectations for the S&P 500's quarterly dividends per share during 2023, which we'll revisit separately in a couple of weeks since we just featured it in the previous edition of our running S&P 500 chaos series. For now, we'll simply observe these positive changes in expectations are shifting the trajectory of the S&P 500's alternative futures upward.

Here are the past week's market-moving headlines:

Monday, 30 January 2023
Tuesday, 31 January 2023
Wednesday, 1 February 2023
Thursday, 2 February 2023
Friday, 3 February 2023

After the Fed's expected quarter point rate hike last week, the CME Group's FedWatch Tool still projects another quarter point rate hike at the Fed's upcoming 22 March (2023-Q1) meeting, followed by another at its 3 May (2023-Q2) meeting, with the latter representing the last for the Fed's series of rate hikes that started back in March 2022. After that, the FedWatch tool anticipates the Fed will hold the Federal Funds Rate at a target range of 5.00-5.25% through September 2023. After which, developing expectations for a U.S. recession in 2023 have the FedWatch tool projecting two quarter point rate cuts, in November and December (2023-Q4).

The Atlanta Fed's GDPNow tool's projection for real GDP growth in the first quarter of 2023 held steady at +0.7%. Meanwhile, the so-called "Blue Chip" consensus forecast is leaning toward negative GDP growth in the current quarter.

Labels: ,

About Political Calculations

Welcome to the blogosphere's toolchest! Here, unlike other blogs dedicated to analyzing current events, we create easy-to-use, simple tools to do the math related to them so you can get in on the action too! If you would like to learn more about these tools, or if you would like to contribute ideas to develop for this blog, please e-mail us at:

ironman at politicalcalculations

Thanks in advance!

Recent Posts

Indices, Futures, and Bonds

Closing values for previous trading day.

Most Popular Posts
Quick Index

Site Data

This site is primarily powered by:

This page is powered by Blogger. Isn't yours?

CSS Validation

Valid CSS!

RSS Site Feed

AddThis Feed Button


The tools on this site are built using JavaScript. If you would like to learn more, one of the best free resources on the web is available at W3Schools.com.

Other Cool Resources

Blog Roll

Market Links

Useful Election Data
Charities We Support
Shopping Guides
Recommended Reading
Recently Shopped

Seeking Alpha Certified