The S&P 500 Bounces To New High

The S&P 500 (Index: SPX) continued following its volatile path, ending the second week of December 2021 by bouncing up to a new record high of 4,712.02.

That volatility continues to fit with the market experiencing Lévy flight events, in which investors are shifting their forward-looking focus back and forth between different two points of time in the future. In this past week, between 2022-Q2 and 2022-Q3, depending on the timing for when the Federal Reserve might start hiking short term interest rates in the U.S.

The alternative futures chart shows investors are splitting their attention between these two future quarters, but are putting a heavier weight on the Fed's rate hiking beginning in 2022-Q3.

(Click on image to enlarge)

That outcome is consistent with this report from the past week, which also appears in our summary of the week's market moving headlines . However, that reported focus doesn't match the timing of the Fed's projected rate hikes from the CME Group's FedWatch tool, which gives greater than 50% probabilities of the Fed's first quarter point rate hike in 2022 taking place in the second quarter, with another two taking place before the end of 2022, in the third and fourth quarters of the year.

(Click on image to enlarge)