Another week, more record highs for the S&P 500 (Index: INX), including a new high closing value for the S&P 500 on Friday, 3 November 2017!
And the S&P 500 continued to behave predictably....
The S&P 500 continues to track along near the upper end of the range we predicted it would if investors remained focused on the expectations associated with the distant future quarter of 2018-Q2. This quarter is currently expected to feature the Fed's first rate hike in 2018, which will follow the now all-but-certain next rate hike set for the current quarter, which will most likely be announced at the conclusion of the Fed's 13 December 2017 meeting.
| Probabilities for Target Federal Funds Rate at Selected Upcoming Fed Meeting Dates (CME FedWatch on 3 November 2017) | ||||||
|---|---|---|---|---|---|---|
| FOMC Meeting Date | Current | |||||
| 100-125 bps | 125-150 bps | 150-175 bps | 175-200 bps | 200-225 bps | 225-250 bps | |
| 13-Dec-2017 (2017-Q4) | 0.0% | 96.7% | 3.3% | 0.0% | 0.0% | 0.0% |
| 12-Mar-2018 (2018-Q1) | 0.0% | 57.3% | 40.5% | 2.1% | 0.0% | 0.0% |
| 13-Jun-2018 (2018-Q2) | 0.0% | 34.0% | 46.3% | 18.1% | 1.6% | 0.1% |
| 26-Sep-2018 (2018-Q3) | 0.0% | 23.8% | 42.1% | 26.4% | 6.9% | 0.7% |
As for the week that was, not much in the way of unexpected happenings occurred. Outside of an initial noisy reaction, the release of the proposed tax cut bill early on Thursday, 2 November 2017 had little effect on stock prices, indicating little surprise on the part of investors. Likewise, President Trump's decision to appoint Jerome Powell to succeed Janet Yellen as the Federal Reserve's next chair wasn't surprising either. More on those stories in our selection of the week's more notable potential market-moving news....
Monday, 30 October 2017
- Brent oil ends above $60 on expected OPEC cut extension
- Wall Street 2017 profits set to surpass last year's: report
- Wall Street slips as Merck drops, tax talk rattles
Tuesday, 31 October 2017
- Oil up near two-year highs, analysts see more U.S. crude exports
- Wall St. ends strong October higher as tech, staples lead
Wednesday, 1 November 2017
- Fed keeps rates unchanged, remains on road to December rate hike
- Dow, S&P 500 end higher as Fed keeps rates steady
Thursday, 2 November 2017
- Republicans unveil tax cut bill, but the hard work awaits
- Trump taps Fed centrist Powell to lead U.S. central bank.
- S&P flat after tax cut plan; Dow climbs to record
Friday, 3 November 2017
- Oil near two-year highs as tightening market woos buyers
- Fed's Kashkari says zero evidence of rise in inflation
- Apple juices Wall St. as indexes climb for another week
The Big Picture's Barry Ritholtz notes the week's positives and negatives for the U.S. economy and markets - it was a week with far more positives than negatives!
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