The fifth and final trading week of May 2017 was shortened by the Memorial Day holiday weekend, but one thing clearly stood out about it. Investors are tightly focused on 2017-Q2 in setting today's stock prices!

The reason for that is straight forward - it has almost everything to do with the expected timing of the Fed's next rate hike in short term U.S. interest rates. But, you don't have to take our word for it - in addition to the S&P 500 tracking our dividend-based model's projections for the path that the S&P 500 would follow if investors are focused on the soon-to-end quarter of 2017-Q2, that assessment also directly correlates with what the headlines of the week revealed about the forward-looking expectations of investors....

Tuesday, 30 May 2017

• As Fed raises rates, aim is not to roil markets, Williams says
  • Fed's Williams says medium-term inflation trend 'pretty favorable'
• Consumer spending, inflation data support Fed rate hike case
• Two Fed banks supported discount rate rise before May meeting: minutes
• Brainard expects Fed rate hikes but eyeing soft inflation
• Wall Street slips as energy, financials lose ground

Wednesday, 31 May 2017

• Oil prices dive 3 percent to three-week low; OPEC crude output up
• Wall Street little changed as financials drop, defensive stocks gain
• Fed's Williams bullish on U.S. economy, sees total three rate hikes this year

Thursday, 1 June 2017

• Weak inflation a worry but pressure likely building: Fed's Kaplan
• Fed buys $4.2 billion of mortgage bonds, sells none
• Fed marching on despite U.S. inflation slump: Powell
  • Traders nearly price in June U.S. rate hike on strong data
• Upbeat U.S. data propel S&P, Nasdaq to record highs; oil steadies

Friday, 2 June 2017

• Oil slides as U.S. climate withdrawal compounds glut concerns
• Fed's Harker still sees two more interest rate hikes in 2017
  • Wall Street sees Fed on track for rate hike in June despite tepid May jobs data: Reuters poll
• Tech leads Wall Street higher; jobs data falls short

Elsewhere, Barry Ritholtz summarizes the week's markets and economic news into positives and negatives.

We'll close with two observations. First, the ticking clock problem that we've mentioned in recent weeks for the S&P 500 is alive and well, where investors will be shifting their attention to some other point of time in the future within the next two weeks, with the expiration of options and futures contracts on 16 June 2017 marking the longest that investors will maintain any of their attention on 2017-Q2. Second, the first week of June 2017 will contain a potential geopolitical noise event in the form of the U.K.'s snap elections and their uncertain outcome that might contribute to triggering a sudden shift in the forward-looking focus of investors.