S&P 500 Reaches New Record Heights

The S&P 500 (Index: SPX) was buoyed up to reach new record heights during the fourth week of April 2019, closing the week at a new all-time record high value of 2,939.88.

Overall, we find the level of the S&P 500 is consistent with investors focusing on the distant future quarter of 2020-Q1, which in our dividend futures-based model of how stock prices work, covers the period from 21 December 2018 through 20 March 2020, coinciding with the dividend futures contracts for that quarter.

The expectations for dividends to be paid out during this time also got a boost during the past week, rising from $14.55 per share to $14.65 per share according to the CME Group’s estimates for S&P 500 quarterly dividend futures.

On the whole, aside from the better than expected economic and earnings news that boosted stock prices during the week, it was relatively quiet with the Fed’s minions muzzled by a news blackout period ahead of its next two-day Federal Open Market Committee meeting on 30 April-1 May 2019, the news from which may affect investor expectations for potential future interest rate cuts.

Speaking of which, the CME Group’s Fedwatch Tool indicates that investors are currently betting on a quarter point cut in the Federal Funds Rate taking place during 2018-Q4.

We’ll find out later this week. In the meantime, here are the notable market-moving headlines we flagged during the fourth week of April 2019.

Monday, 22 April 2019

• Oil jumps on U.S. plans to tighten Iran sanctions; dollar eases
• U.S. home sales tumble as supply constraints linger
• Wall Street near flat in quiet session ahead of earnings wave

Tuesday, 23 April 2019

• Oil surges amid OPEC caution to offset Iran sanctions
• Bigger stimulus developing in China: Capital requirements for China’s small lenders will be eased after quarterly review: sources
• U.S. may follow China with first quarter GDP upside surprise

• U.S. new home sales hit one-and-a-half-year high on lower mortgages, prices

A silvery lining: S&P 500, Nasdaq hit record closing highs on upbeat earnings

• A gloomy interior: S&P 500 closes at record high, even as EPS growth stagnates

Wednesday, 24 April 2019

• Oil hovers near six-month high as U.S. stockpile build counters supply fears
• U.S. mortgage applications post biggest fall in four months: MBA
• Bigger trouble and stimulus developing in China:

• China’s economy still faces downward pressure: premier
• China central bank injects 267 billion yuan in targeted loans as broader easing appears on hold

Wall Street edges lower, energy stocks fall

Thursday, 25 April 2019

• Brent slips from $75 per barrel as investors doubt rally will endure
• S&P 500 nudges lower as industrials drag

Friday, 26 April 2019

• Oil sinks 3% as Trump again pressures OPEC to lower crude prices
• U.S. stimulus on the way: J.P. Morgan, Morgan Stanley see U.S. Fed may cut interest on reserves next week
• US GDP Exceeds Expectations At 3.2%

• The big mystery in the GDP report — where did the inventories come from?

U.S. GDP data boosts stocks; S&P 500 posts record close

Barry Ritholtz found six positives and six negatives for U.S. markets and the economy in his weekly bigger picture overview of the week’s events.