Welcome back from the Thanksgiving holiday! We're pleased to confirm that not much happened to affect stock prices during the week that was, so if you took the entire week off, you really didn't miss much.

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That's because there was little news originating in the U.S. to give markets a convincing direction during the past week. The Thanksgiving holiday-shortened trading week saw the S&P 500 (SPX) close at 4559.34, up 1.0% from the previous week's close.

For the latest update of the alternative futures chart, we find the index is continuing to follow a flat-to-slightly rising trajectory. That puts it above the unadjusted dividend futures-based model's short term projections, but that's only because we've chosen to not extend the redzone forecast range to account for the short term echo from October 2023's outlier noise event.

That echo effect is a result of the dividend futures-based model's use of historic stock prices as the base reference points from which it projects the future for the S&P 500. Those base reference points are taken from the S&P 500's value some 13 months, 12 months, and 1 month earlier. October 2023's short-term spike in long-term U.S. Treasury rates occurred just one month ago, so the model's raw projections are being skewed by the volatility in stock prices at that time. The echo will stop affecting the model's projections in one week, coinciding with its dissipation.

Our summary of the past week's market-moving headlines is blissfully short:

Monday, 20 November 2023

• Signs and portents for the U.S. economy:
  • Oil climbs over 2% as OPEC seen deepening cuts
• BOJ minions counting on Japanese firms giving out big raises to end never-ending stimulus:
  • Analysis-Japan's back-to-back wage bonanza would open door for BOJ exit
• Bigger trouble developing in the Eurozone:
  • Germany heading for another poor quarter, "arduous" recovery: Bundesbank
  • Poor euro zone bank valuations seen a drag on credit growth: ECB
• ECB minions signal they're ready to sit on their hands:
  • ECB rates to stay unchanged for next few quarters -Villeroy
• Nasdaq leads Wall Street gains as Microsoft hits record
  • Microsoft emerges as big winner from OpenAI turmoil
    • Ousted OpenAI CEO Sam Altman joins Microsoft to lead advanced AI team
    • Microsoft coup leads AI stocks higher as OpenAI mess continues
  • Investors pump over $600 million into defense funds as geopolitical tensions rise

Tuesday, 21 November 2023

• Signs and portents for the U.S. economy:
  • Oil edges lower on caution ahead of OPEC+ meeting
  • US existing home sales slump to more than 13-year low, prices accelerate
• Fed minions say they'll stay hawkish on inflation, start to see other problems:
  • 'Hawkish' FOMC Minutes: Warn On Fading Consumer, Financial System Stability Risks
  • Fed shifts into cautious policy mode as risks become more two-sided
• Bigger stimulus developing in China:
  • China Picks 50 Developers For $138 Billion Gambit To Stem Real Estate Crisis
• BOJ minions see return of inflation, consider ending never-ending stimulus:
  • Analysis-Japan's inflation comeback prompts investors to tear up old playbooks
• ECB minions worried about inflation, drag from real estate on Eurozone banks:
  • ECB says property slump could last years in threat to lenders
  • ECB's Lagarde warns against premature inflation celebration
• Eurozone government minions want less spending next year:
  • Euro zone to tighten fiscal policy in 2024, some still to spend too much -Commission
• S&P 500, Nasdaq close down, ending 5-session winning streaks; retailers, tech weak
  • US retailers brace for a tough holiday season despite discounts

Wednesday, 22 November 2023

• Signs and portents for the U.S. economy:
  • OPEC+ postpones policy meeting to Nov 30, oil falls
  • US mortgage interest rates fall to two-month low
  • US durable goods orders fall on weakness in transportation equipment sector
• Bigger stimulus developing in China:
  • Exclusive-China govt advisers call for steady growth target in 2024, more stimulus
• Majority of economists want BOJ minions to end never-ending stimulus next year:
  • BOJ to end negative interest rates in 2024, over 80% of economists say - Reuters poll
• ECB minions starting to think they might be done with rate hikes and may need to start cutting them instead:
  • ECB's Nagel: rates at peak or close, rules out hard landing
  • ECB's Centeno sees conditions to reverse rate cycle 'in the near future'
• Nasdaq, S&P, Dow post pre-Thanksgiving gains; yields rise while oil pares losses

Friday, 24 November 2023

• Signs and portents for the U.S. economy:
  • Oil settles lower but notches weekly gain ahead of OPEC+ decision
  • White House stalls ethanol expansion in Midwest amid price concerns
• Bigger trouble developing in China:
  • China launches social security fund-backed $707 million investment fund in Shanghai
  • How to save China’s economy
• Bigger trouble developing in Japan:
  • Japan's factory activity shrinks for 6th month on weak demand - PMI
  • Japanese inflation picks up as BOJ pivot bets grow
• Bigger trouble developing in the Eurozone:
  • Euro zone business activity fell again in Nov, stoking recession fears -PMI
    • Germany's economy shrinks slightly in third quarter
      • Germany financial sector facing dark clouds, Bundesbank warns
      • German home prices to plunge further; no respite from surging rents
    • French business activity contracts again in November -flash PMI
• ECB minions told to "resist urge" to cut rates sooner:
  • ECB must resist urge to cut rates early, Bundesbank chief says
• Wall St ends mixed in truncated Black Friday trading

The CME Group's FedWatch Tool continues to expect the Fed will hold the Federal Funds Rate steady in a target range of 5.25-5.50% through next April (2024-Q2). Starting from 1 May (2024-Q2), investors expect deteriorating economic conditions will force the Fed to start a series of quarter point rate cuts at six-to-twelve-week intervals through the end of 2024, unchanged from their expectations of a week earlier.

The Atlanta Fed's GDPNow tool's estimate of real GDP growth for the current quarter of 2023-Q4 ticked back up to +2.1% from last week's projected +2.0% annualized growth.

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