We're returning to the cutting edge of the physics that describes how stock prices behave today, as we look backwards and forwards in time to sort out why the U.S. stock market is behaving as it is.
First, let's cover what's going on with the fundamental driver of stock prices: their underlying dividends per share. Our first chart shows what the dividend futures contracts reported by IndexArb indicate that investors are currently expecting to be paid out by S&P 500 companies in 2013:
Next, here's how those quarterly dividends per share translate into trailing year dividends per share, which stock prices more closely track:
Political Calculations is a site that develops, applies and presents both established and cutting edge theory to the topics of investing, business and economics.
Be the first to read Political Calculation's column. Sign up today and receive Townhall.com delivered each morning to your inbox.
New Time 11:20 AM PT: Get the Market Movements in Advance: William's Edge Webinar for Thursday April 17th, 2014 | John Ransom
New Time 11:20 AM PT: Get the Market Movements in Advance: William's Edge Webinar for Wednesday April 16th, 2014 | John Ransom
New Time 11:20 AM PT: Get the Market Movements in Advance: William's Edge Webinar for Thursday April 10th, 2014 | John Ransom