QVML - An Uneventful Thanksgiving Holiday Week For The S&P 500
2023-11-27 20:47:00 ET
Summary
- The Thanksgiving holiday-shortened trading week saw the S&P 500 close at 4559.34, up 1.0% from the previous week's close.
- October 2023's short-term spike in long-term U.S. Treasury rates occurred just one month ago, so the model's raw projections are being skewed by the volatility in stock prices at that time.
- The CME Group's FedWatch Tool continues to expect the Fed will hold the Federal Funds Rate steady in a target range of 5.25-5.50% through next April (2024-Q2).
Welcome back from the Thanksgiving holiday! We're pleased to confirm that not much happened to affect stock prices during the week that was, so if you took the entire week off, you really didn't miss much.
That's because there was little news originating in the U.S. to give markets a convincing direction during the past week. The Thanksgiving holiday-shortened trading week saw the S&P 500 (Index: [[SPX]]) close at 4559.34 , up 1.0% from the previous week's close.
For the latest update of the alternative futures chart, we find the index is continuing to follow a flat-to-slightly rising trajectory. That puts it above the unadjusted dividend futures-based model 's short term projections, but that's only because we've chosen to not extend the redzone forecast range to account for the short term echo from October 2023's outlier noise event.
That echo effect is a result of the dividend futures-based model's use of historical stock prices as the base reference points from which it projects the future for the S&P 500. Those base reference points are taken from the S&P 500's value some 13 months, 12 months, and 1 month earlier. October 2023's short-term spike in long-term U.S. Treasury rates occurred just one month ago, so the model's raw projections are being skewed by the volatility in stock prices at that time. The echo will stop affecting the model's projections in one week, coinciding with its dissipation.
Our summary of the past week's market-moving headlines is blissfully short:
Monday, 20 November 2023
- Signs and portents for the U.S. economy:
- BOJ officials counting on Japanese firms giving out big raises to end never-ending stimulus:
- Bigger trouble developing in the Eurozone:
- ECB officials signal they're ready to sit on their hands:
- Nasdaq leads Wall Street gains as Microsoft hits record
Tuesday, 21 November 2023
- Signs and portents for the U.S. economy:
- Fed officials say they'll stay hawkish on inflation, start to see other problems:
- Bigger stimulus developing in China:
- BOJ officials see return of inflation, consider ending never-ending stimulus:
- ECB officials worried about inflation, drag from real estate on Eurozone banks:
- Eurozone government officials want less spending next year:
- S&P 500, Nasdaq close down, ending 5-session winning streaks; retailers, tech weak
Wednesday, 22 November 2023
- Signs and portents for the U.S. economy:
- Bigger stimulus developing in China:
- Majority of economists want BOJ officials to end never-ending stimulus next year:
- ECB officials starting to think they might be done with rate hikes and may need to start cutting them instead:
- Nasdaq, S&P, Dow post pre-Thanksgiving gains; yields rise while oil pares losses
Friday, 24 November 2023
- Signs and portents for the U.S. economy:
- Bigger trouble developing in China:
- Bigger trouble developing in Japan:
- Bigger trouble developing in the Eurozone:
- ECB officials told to "resist urge" to cut rates sooner:
- Wall St ends mixed in truncated Black Friday trading
The CME Group's FedWatch Tool continues to expect the Fed will hold the Federal Funds Rate steady in a target range of 5.25-5.50% through next April (2024-Q2). Starting from 1 May (2024-Q2), investors expect deteriorating economic conditions will force the Fed to start a series of quarter-point rate cuts at six- to twelve-week intervals through the end of 2024, unchanged from their expectations of a week earlier.
The Atlanta Fed's GDPNow tool 's estimate of real GDP growth for the current quarter of 2023-Q4 ticked back up to +2.1% from last week's projected +2.0% annualized growth.
Editor's Note: The summary bullets for this article were chosen by Seeking Alpha editors.
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An Uneventful Thanksgiving Holiday Week For The S&P 500