The S&P 500 (SPX) experienced an uneventful week, with little new information to prompt a compelling swing in any direction. What news there was led to the index dipping to 4464.05, a week-over-week decline of 0.3%.

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That's well within the "few percent" range we predicted would apply through this upcoming Friday in last week's edition.

If you look at the latest update to the alternative futures chart, we find that as expected, the trajectory is running below the dividend futures-based model's raw projections for this period.

That's because the model's projections are anchored to historic stock prices from 13 months, 12 months, and 1 month earlier. Because of that, the model's projections are affected by the past volatility of stock prices at these times. In this case, that past volatility is such that those projections are being skewed upward during this short two week period.

Because that is such a short period, we're opting to not add a redzone forecast range to the chart to account for that factor. As it stands, in about two weeks, we'll be coming up on a period where the model's projections will be skewed lower than what the actual trajectory of the S&P 500 will traverse for much longer period of time, where we will make that visual adjustment.

Meanwhile, we did say the trading week was uneventful. Here's our summary of what passes for the market-moving headlines was of the week that was.

Monday, 7 August 2023

• Signs and portents for the U.S. economy:
  • Oil prices drop 1% on fears of weaker demand
  • U.S. consumers saying 'bad time to buy' a house hits 13-year high in July
• Fed minions thinking about more rate hikes:
  • Fed's Bowman says more US rate hikes likely will be needed
• Bigger trouble, stimulus developing in China:
  • China's exports likely contracted further in July, imports downturn seen slowing: Reuters poll
    • Analysis-China can no longer 'extend and pretend' on municipal debt
    • China's July economic losses from disasters exceed January-June
• BOJ minions starting to worry about inflation:
  • BOJ debated prospects of sustained inflation at July meeting-summary
• S&P 500, Nasdaq advance as U.S. stocks rebound; Dow jumps more than 400 points
  • S&P 500 quarterly earnings have been upbeat; revenue not so much

Tuesday, 8 August 2023

• Signs and portents for the U.S. economy:
  • Oil slips as weak China data offsets tightening supply
• Some Fed minions not so excited to keep hiking interest rates:
  • Fed's Harker: May be at point to 'hold rates steady'
• Bigger trouble developing in China:
  • China's trade slumps, threatening recovery prospects
    • China's July exports fall 14.5% y/y, imports down 12.4%
  • China's car sales fall for 2nd month in July as price war continues
• BOJ minions starting to think inflation may be a problem in Japan:
  • Japan's real wages down for 15th month in test for BOJ policy, economy
• Wall St ends lower after bank rating cuts spark wider sell-off
  • US bank stocks drop as Moody's downgrade sours sentiment
    • Analysis-Moody's warning on US banks a wake-up call for sanguine investors

Wednesday, 9 August 2023

• Signs and portents for the U.S. economy:
  • Oil hits new highs on US fuel demand, tighter supply
    • Oil output inches up at top US shale firms, with faster growth elusive
  • U.S. mortgage rates spike to highest since November, approach 22-year high
• Bigger trouble developing in China:
  • China tips into deflation as efforts to stoke recovery falter
  • Latest China developer debt woes could spur policy aid, but industry downbeat
• Wall Street ends lower as investors await US inflation data

Thursday, 10 August 2023

• Signs and portents for the U.S. economy:
  • Oil settles lower as US rate hike fears subside, China demand weighs
  • US consumer prices rise moderately in July
    • US economy in 'uncharted waters' as inflation falls with low unemployment -study
  • US mortgage delinquency rates fall to all-time low
• Fed minions claim they hope to keep hiking rates:
  • Daly: Premature to say if Fed has done enough on rates
• BOJ minions get reason to keep never-ending stimulus alive:
  • Japan wholesale inflation slows again, bolstering case for stimulus
• ECB minions have bigger problem on their hands:
  • Analysis-ECB is on back foot and for once it's down to Germany
• Wall Street ends flat, after pop from July inflation data fizzles
  • Traders bet Fed rate hikes are over, cuts to start in 2024

Friday, 11 August 2023

• Signs and portents for the U.S. economy:
  • Oil up on record demand forecast, 7th straight weekly gain
• Just who are these Fed minions anyway?
  • Fed doves, Fed hawks: a look at how U.S. central bankers fly
• Bigger trouble developing in China:
  • China July new bank loans tumble, credit growth weakens further
• Bigger bailouts developing in China:
  • Country Garden restructuring fears deepen China property concerns
  • China to replace $140 billion LGFV debt with local bonds - Bloomberg News
• ECB minions maybe thinking about not hiking rates in September:
  • ECB to pause in September, say slim majority of economists: Reuters poll
• S&P, Nasdaq end lower for the week, with the latter declining nearly 2%; Dow advances
  • Big tech losses sink Nasdaq, S&P as US Treasury yields rise

As might be expected from such an uneventful week, the CME Group's FedWatch Tool showed little-to-no change from last week in its projections for the future of how the Fed will set interest rates. It projects no future rate hikes through April 2024, followed by a series of quarter point rate cuts will begin as early as 1 May (2024-Q2) and continue at six-to-twelve-week intervals through the end of 2024.

The Atlanta Fed's GDPNow tool boosted its estimate of real GDP growth in 2023-Q3 to +4.1% from the previous week's estimate of +3.9%.

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