For a moment during the first week of February 2019, the S&P 500 (Index: SPX) looked like it might fully break out of the range described by our redzone forecast, but alas, it only poked just above the upper end of the range for a few days before dropping back into it.

Had the S&P 500 stayed above that level, it would have been an indication that investors were starting to look further forward to 2019-Q2 according to our dividend futures-based model of how stock prices work. Since they subsequently dropped back within the redzone forecast range, which is based on the assumption that investors would remain focused on the current quarter of 2019-Q1, it's more likely these data points were just temporary outliers.

Perhaps a better question is: why didn't the S&P 500 drop further? We could argue that if investors are more focused on 2019-Q1 in setting stock prices, we should see more of a reversion to the mean that corresponds with that assessment, where the mean would be vertically located in the middle of the redzone forecast range.

We haven't seen a good answer for that question as yet, where none of the market-moving headlines we noted during the past week stood out as potential explanations for why not.

Monday, 4 February 2019

• Oil slides on disappointing U.S. data after hitting two-month high
• Dove vs Hawk:
  • Fed's Kashkari: Rate hike pause keeps U.S. growth on track
  • Fed's Mester says rates may need to rise if U.S. growth stays on track
• Bigger trouble developing in China: China unveils tax cuts for graduates, low-income workers in stimulus drive
• Boost in tech shares sends Wall Street higher

Tuesday, 5 February 2019

• Oil fumbles on global economic worries, dollar strength
• Fed's Kaplan says patience on rates could last several months
• Earnings send Wall St higher as investors eye State of the Union speech

Wednesday, 6 February 2019

• Oil rises 1 percent on signs of tightening global oil supply
• Fed's balance sheet shrinkage keeps key U.S. rates elevated: study
• Fed's Quarles says Chinese 'downdraft' weighs on global economic outlook
• Wall Street rally pauses after underwhelming revenue forecasts

Thursday, 7 February 2019

• Oil drops as global economic concerns grip market
• Bigger trouble developing in Europe: EU slashes euro zone growth outlook, expects inflation to slow
• Bigger trouble developing in... India? India unexpectedly cuts key rate, changes stance to neutral
• Fed's Kaplan says rates are in 'neighborhood' of neutral now
  • Fed's Kaplan reiterates case for pause on rate hikes
  • Fed's Bullard: U.S. likely to miss inflation target for eighth year
  • Fed's Bullard considers current U.S. rate setting 'slightly restrictive'
  • Fed's Bullard: 'Restrictive' U.S. policy likely curbing inflation
• No talks between Trump and China's Xi before trade deadline
• Wall Street slides on renewed U.S.-China trade fears

Friday, 8 February 2019

• More China stimulus: China Jan new bank loans seen surging as PBOC keeps liquidity taps open
• Fed's Daly embraces patience on rates, cites financial conditions
  • Fed debating if balance sheet should be regular tool, Daly says
• S&P, Nasdaq edge higher as earnings offset trade fears

Barry Ritholtz listed each of the positives and negatives he found in the week's markets and economy-related news.

We'll see if the market provides any more clarity in the second week of February 2019, which will be noteworthy because China returns from its week-long Spring Festival/Lunar New Year holiday, where the output of data from that troubled economy will resume.