New Lévy Flight Event Sinks S&P 500 in Final Week of October 2020

As if 2020 wasn't crazy enough already, the S&P 500 (Index: SPX) experienced a new Lévy flight event on 28 October 2020, sending the index down 3.5% for the day as investors suddenly shifted their forward-looking focus from 2020-Q4 toward the more distant future quarter of 2021-Q1. Overall, the index ended the final trading week of October 2020 some 5.6% lower than the previous week, ending the month at 3,269.96.

Since we've already covered that event as an update to the previous entry in the S&P 500 chaos series, let's update that update through Friday, 30 October 2020 by noting that investors have continued focusing on 2021-Q1 in setting current day stock prices.

With the outcome of the 3 November 2020 having the potential to greatly affect the expectations for future dividends, here is the latest snapshot of those expectations:

Finally, here's a sampling of the random onset of new information that investors absorbed in the final week of October 2020.

Monday, 26 October 2020

• Signs and portents for the U.S. economy:
  • Oil drops 3% as virus infections, Libyan oil output rebound
  • U.S. new home sales drop; record low mortgage rates underpinning demand
• Bigger trouble developing in Eurozone:
  • SAP drags down German shares, COVID-19 worries weigh on broader Europe
  • German government raises 2020 GDP forecast to -5.5%, source says
  • German business morale falls on virus angst as rebound fades
• ECB minions prepping for big bank merger/bailouts, debate new stimulus round, deal with woke leader:
  • Cross-border mergers in Europe would help diversify banks: ECB's de Cos
  • Testing times: Five questions for the ECB
  • From climate change to equality, Lagarde turns ECB more political
• Wall Street closes down on soaring virus cases, U.S. stimulus worries
  • COVID-19 pandemic deals body blow to quant models, study shows

Tuesday, 27 October 2020

• Daily signs and portents for the U.S. economy:
  • Oil rises 2% on U.S. Gulf shutdowns, outlook weak
  • Trump says COVID-19 aid deal expected after Nov. 3 election
• Bigger trouble developing in China, changing recovery plan:
  • China's industrial profit growth slows as factory-gate deflation weighs
  • Explainer: What to watch at the fifth plenum of China's Communist Party
  • China's economic growth seen hitting a 44-year low in 2020, bounce 8.4% in 2021: Reuters poll
• ECB minions planning Eurozone bank bailouts:
  • ECB's Enria backs a network of bad banks to mop up bad loans
  • Eurozone banks curtail credit access amid fresh pandemic worries
• S&P 500, Dow slip on worries about earnings, U.S. stimulus outlook

Wednesday, 28 October 2020

• Signs and portents for the U.S. economy:
  • Oil plunges over 5% to a four-month low as pandemic surges, U.S. crude output soars
  • Record U.S. third-quarter growth assured as goods trade deficit falls, inventories rise
  • U.S. businesses splurge on insurance to protect against post-election chaos
• Bigger trouble developing in the Eurozone:
  • Europe a sea of red: German shares plunge up to 5% on emergency lockdown
• Bigger stimulus developing in the Eurozone:
  • Germany seals new aid package worth 10 billion euros to compensate firms: sources
• Wall Street sinks 3%, Dow at late July lows as pandemic surges

Thursday, 29 October 2020

• Daily signs and portents for the U.S. economy:
  • Economy Roars Back in Third Quarter With 33.1% Growth in GDP
  • Oil extends losses with 4% slump on renewed lockdowns
• Post coronavirus recession recovery signs in Japan, Asia:
  • Japan's factory output rises for fourth month on jump in car, machinery production
  • Analysis: As COVID persists and U.S. election nears, China growth lifts Asia
• ECB minions hint at, but deliver, no new stimulus despite lockdowns triggering double-dip recessions:
  • Eurozone faces risk of a double-dip recession, ECB supervisor says
  • ECB keeps stimulus unchanged but hints at December action
  • ECB eyes more bond buys, cheap loans in December as pandemic hits
  • Lagarde comments at ECB press conference
• Wall Street rebounds as market eyes tech results, strong U.S. data

Friday, 30 October 2020

• Daily signs and portents for the U.S. economy:
  • Oil falls on demand concerns, posts second monthly decline
    • Coronavirus, consolidation taking toll on energy jobs
  • U.S. Senate leader says coronavirus aid bill should advance in early 2021
  • U.S. consumer spending beats expectations in September
• Fed minions expand small business loan program:
  • Fed reduces loan minimum, easing terms for Main Street program
• Bigger trouble developing in Eurozone:
  • Eurozone economy surges in the third quarter before expected blow from new lockdowns
  • German government: Economy will shrink 5.5% this year, expand 4.4% in 2021
• Recovery signs in Asia:
  • Hong Kong recession shows signs of slowing as China economy expands
• ECB minions demonstrate an amazing grasp of obvious:
  • ECB's Visco says worsening COVID picture could hit eurozone recovery
  • ECB ready to help but must be mindful of side effects: Mersch
• Tech slide, pandemic surge slam Wall Street, biggest weekly loss since March

Elsewhere, Barry Ritholtz lists 8 positives and 8 negatives he found in the past week's economics and markets news.