Unexpectedly Intriguing!
05 June 2023
Charging Bull Statue by Petr Kratochvil via PublicDomainPictures.net - https://www.publicdomainpictures.net/en/free-download.php?image=charging-bull-statue&id=240005

The S&P 500 (Index: SPX) had its best week as it exited May and entered June 2023, rising over 1.8% to reach 4282.37, its highest level since 18 August 2023. That also puts the level of the index some 10.7% below its record high peak of 4,796.56 that it set on 3 January 2021.

All of that positive increase was achieved after two major news events during the week. The first came on Thursday, 1 June 2023, shortly after the Federal Reserve's Patrick Harker announced the Fed "really should skip" hiking rates in June 2023.

The second news event came at 8:30 AM on Friday, 2 June 2023, when the May employment situation report was released. While reporting higher than expected employment levels, it more significantly reported slowing wage growth.

The two actions together signal slowing inflation and a more positive environment for stock prices, which rose both sharply and shortly after each of these news events. The two events boosted the redzone forecast trajectory on the latest update of the alternative futures chart.

Alternative Futures - S&P 500 - 2023Q2 - Standard Model (m=+1.5 from 9 March 2023) - Snapshot on 2 Jun 2023

A deal to raise the U.S. government's debt ceiling was also reached during the week, but all the news related to that development proved to have little to no impact on the trajectory of stock prices. We're basing that assessment on the lack of notable changes in the trajectory of E-Mini S&P 500 futures at the times significant news related to the debt ceiling deal occurred, but which do show significant changes in the trajectory of stock prices that correspond to the timing of the two market moving news events we've highlighted.

Speaking of the week's market moving headlines, here's our recap of what happened during the Memorial Day holiday-shortened trading week.

Tuesday, 30 May 2023
Wednesday, 31 May 2023
Thursday, 1 June 2023
Friday, 2 June 2023

After Fed officials signaled they will pause in hiking the Federal Funds Rate in June, the CME Group's FedWatch Tool changed its projections to match that expectation. It now projects the Federal Reserve will not hike rates until the Fed's Open Market Committee meets on 26 July 2023, when a quarter point rate hike is anticipated. That would put the Federal Funds Rate at a target range of 5.25-5.50%, which the tool also anticipates will be the peak for the series of rate hikes that began in March 2022. The FedWatch Tool still anticipates the Fed will hold rates at that peak level until its 31 January (2024-Q1) meeting, at which it is will initiate a series of quarter point rate cuts at six-to-twelve-week intervals to address recessionary conditions in the U.S. economy.

The Atlanta Fed's GDPNow tool estimate of the real GDP growth rate for 2023-Q2 ticked up to +2.0% from the +1.9% growth rate it forecast a week earlier.

Image credit: Charging Bull Statue by Petr Kratochvil via PublicDomainPictures.net. Creative Commons. CCO Public Domain.

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