After see-sawing during much of the trading week, the S&P 500 (Index: SPX) rose to close the volatile week at 2,874.56. That is 511.59 points lower than the record high closing value the S&P 500 hit back on 19 February 2020, just before the spreading coronavirus pandemic sent stock prices crashing, and that is 637.16 points higher than the bottom of 2,237.40 the index recorded on 23 March 2020, which marks the beginning of when the Federal Reserve finally began ramping up major interventions to provide liquidity to cash-starved businesses.

Through the close of trading on ending Friday, 17 April 2020, it appears those interventions have flipped the normal order for stock prices upside down, causing the amplification factor that relates changes in the growth rate of dividends to changes in stock prices to become negative. The alternative futures forecast chart shows the effect of that regime change, which appears to have taken place in stages.

Right now, the chart reflects a general outline of how the amplification factor m has been changing over the last few weeks, after having been virtually a fixed constant over the past decade. Additional work needs to be done to refine the timeline of the Fed's actions to quantify the impact they have had and are having on the value of stock prices.

We cannot understate that apparent impact. In a comparatively stable stock market environment, stock prices rise when changes in the expected future growth rate of their underlying dividends per share are positive and they fall when those changes in the expected future growth rate of dividends turn negative, which makes intuitive sense. In the upside down market the Fed has created during the last three weeks, stock prices are rising even though the expected change in the growth rate of dividends per share over the foreseeable future are negative. Nobody as yet has any idea of how stable that new regime might be, nor how long the Fed might be able to sustain it, nor how the Fed might ever be able to stop doing what it has started without creating a massive disruption in the markets.

The Day They Paid People To Take Oil

Update 20 April 2020, 9:30 PM Eastern: We picked the right headline for this edition of our S&P 500 chaos series, as the U.S. economy has indeed entered the proverbial Upside Down. The evidence for that was the crash of West Texas Intermediate crude oil prices, which turned negative to close at -$37.63 per barrel for the first time in history today, where low demand and the absence of storage space in Cushing, Oklahoma led oil suppliers to offer to pay people to take their oil because they don't have anyplace else to keep it.

This isn't just a U.S. story. With an oil glut developing all over the world, a race is on to find places to store crude oil, with oil tankers in exceptionally high demand as producers have turned to storing their oil on the high seas.

The dim prospects for oil demand being restored anytime soon sent the S&P 500's dividend futures for 2020-Q2 notably lower. Meanwhile, the S&P 500 itself closed lower, dropping only 1.79% to close at 2,823.16. If not for being in the Upside Down, it's likely stock prices would have fallen much, much further.

The S&P 500's wild ride would seem far from over.