The S&P 500 Wavers Before Clocking New High

The S&P 500 (Index: SPX) broke its seven-day winning streak to start the week and though it wavered, it closed the Fourth of July holiday-shortened week at a new high.

In doing that, it confirmed our observation that investors have shifted their forward-looking attention to the more distant future quarter of 2022-Q1. We see that confirmation as the redzone forecast ranges reached its end, with the level of the index coinciding with where the dividend futures-based model indicates it would be if investors fixed their sights on that more distant future quarter.

The news of the week didn't do much to alter that apparent shift in investor outlook. Here are the headlines we flagged for their market-moving potential during the week that was.

Tuesday, 6 July 2021

• Fed minions racking up problems requiring action:
  • Quickening U.S. recovery puts Fed taper discussion in focus
  • Explainer: How excess cash is playing out in U.S. reverse repo and money markets
  • The great exit: central banks line up to dial back emergency stimulus
• Amazing connection between lifting lockdowns and improved business activity documented:
  • Euro zone business activity soared in June as lockdowns lifted
  • Euro zone retail sales rebound more than expected in May
• Big trouble developing in China, Germany, Taiwan:
  • China's auto sales likely to fall 16% in June, trade body says
  • German industrial orders fall unexpectedly in May
  • Taiwan jobless rate spikes to 7-year high on virus curbs
• ECB minions looking to continue bank bailouts:
  • ECB open to giving banks more time to rebuild capital buffers
• Dow, S&P 500 fall as financials drag; Nasdaq at record

Wednesday, 7 July 2021

• Signs and portents for the U.S. economy:
  • U.S. job openings edge higher in May, hiring slips
  • Surging US Treasuries drop benchmark 10-year yield to 1.3%
    • Short exit stampede at 1.4% drives U.S. Treasury yield slump, traders say
  • U.S. mortgage application volumes at lowest since early 2020 -MBA
• Fed minions talk taper, unlimited repo, inflation, and their fear of COVID in June minutes:
  • Inflation, COVID-19 and debt top central bank worries - UBS survey
  • Fed discussed design for possible standing repo facility, minutes show
    • Fed keen to be 'well positioned' to act on inflation, other risks, minutes show
    • June FOMC minutes don't much alter taper narrative
    • Minutes of Federal Reserve June 15-16 policy meeting
  • Fed's Bostic: Infection spike due to Delta variant could slow recovery
• Bigger stimulus developing in China:
  • China's cabinet says it will use RRR cuts to support real economy
• S&P 500, Nasdaq post record closing highs after Fed minutes

Thursday, 8 July 2021

• Signs and portents for the U.S. economy:
  • U.S. jobless claims unexpectedly rise, overall trend points lower
• Fed minions close emergency pandemic lending program:
  • NY Fed terminates commercial paper funding facility
• Bigger stimulus developing in China:
  • China govt bond yields slump after cabinet floats RRR cuts
  • China central bank says will keep yuan stable to help exporters
  • Explainer: Is China set to cut RRR soon? What are the implications?
• Bigger trouble developing in Japan:
  • Exclusive: BOJ seen cutting this year's growth forecast as COVID-19 curbs hurt outlook - sources
• ECB minions reveal beneficiaries of continuing stimulus drive, not sure on direction of monetary policy and inflation:
  • Euro zone banks' bad loan ratio eases again, ECB data shows
  • ECB failed to agree on new guidance, to revisit July 22 - sources
• Wall Street ends lower as recovery momentum concerns spark sell-off

Friday, 9 July 2021

• Signs and portents for the U.S. economy:
  • Double whammy for food buyers as freight costs spike amid high grain prices
• Fed minions concerned about global COVID:
  • Fed's Daly says low vaccination rates a risk to global economy - FT
• Bigger trouble, stimulus developing in China:
  • China's corporate bond defaults touch a record high
  • China cuts reserve requirement ratio for all banks
    • China frees up $154 billion for banks to underpin economic recovery
    • China June new bank loans, broad credit growth surge past expectations
  • Analysis-China's RRReminder that economies remain fragile
• ECB minions debate reducing stimulus, claim they won't create too much inflation to make up for too little in past, won't cancel pandemic debt:
  • ECB debated reducing stimulus in June meeting: accounts
  • New ECB policy will not try to make up for lost inflation: Weidmann
  • Post-pandemic public debt cannot be cancelled, says ECB's Villeroy
• Wall Street posts record closing highs as financials lead rebound

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