In Week 3 of July 2017, the S&P 500 continued to set new all time highs, with the newest peak closing value of 2473.83 set on Wednesday, 19 July 2017.

No real surprise there, right? With investors apparently focused on 2018-Q1, the S&P 500 is behaving pretty much as our dividend futures-based forecasting model anticipated.

Coming into the fourth week of July 2017, we anticipate that our dividend forecasting model will be affected by the echoes of past volatility in stock prices during this week and the next, where we expect that our model’s projections will fall on the high side of the actual trajectory of the S&P 500. This is an artifact of our model’s use of historic stock prices as the base reference points from which we project future stock prices, where we’ve found that simply “connecting the dots” of the projections on either side of the period affected by the volatility echoes has worked well as a tool to correct the effect. Because of the short duration of the upcoming echo, we’ll leave that as an exercise for you!

To help save time and effort, you’ll only want to do that with the projections associated with how far forward in time investors are currently focusing their attention. While you can use our alternative futures chart to help determine which point of time in the future investors are focusing upon, we’re test driving the CME Group’s FedWatch Tool for that purpose.

Here, you will be looking for the timing of when investors are betting real money that the Fed will change its Federal Funds Rate. Currently, the FedWatch tool is indicating the following probabilities of the Fed changing short term U.S. interest rates from their current range of 100-125 basis points (bps, or 1.00%-1.25%) at each of their meetings near the end of upcoming quarters: