Equity markets fell on Wednesday with the S&P 500 down 3.1%,
\nextending the index’s losses to 9.4% since hitting an all-time closing high
\njust a few weeks ago on 20 September. With today’s decline the S&P 500
\nhas erased its price gain for the year. Bonds rallied with the yield on the 10-
\nyear Treasury falling six basis points to finish at 3.11%.<\/p>\n
Since the current sell-off began a few weeks ago, investors have been
\nworried about the potential negative impacts of higher interest rates, signs
\nof weaker global growth and potential disruption from tariffs. Data out
\ntoday reinforced these concerns. The revelation that pipe bombs were
\nmailed to well-known individuals and a media outlet likely only exacerbated
\ninvestors’ worries.<\/p>\n
In Europe the initial reading on business sentiment for the month of
\nOctober, as gauged by the Markit Purchasing Managers Index, was weaker
\nthan expected. Concerns about trade appear to be driving up business
\nuncertainty. In the US the Markit sentiment gauge was a bit stronger than
\nexpected. However, new home sales weakened, stoking fears that the
\nincrease in interest rates this year is weighing on demand.<\/p>\n
Overall we believe 3Q earnings growth in the US will be strong with S&P
\n500 profits up 23-24% driven by 7-8% revenue growth on generally
\nhealthy domestic activity. <\/p>\n
Still, leading indicators for the US economy and earnings remain favorable The nearly 10% decline in US stocks over the last month appears excessive Equity markets fell on Wednesday with the S&P 500 down 3.1%,However, unlike earnings reports in the first half
\nof the year, US companies are contending with some pockets of softness
\nin the global economy, especially in auto markets in Europe and China and
\nsome shorter-cycle industrial markets.<\/quote><\/p>\n
\nand we don’t believe the US is in danger of slipping into a recession in
\nthe near term. For 2019 we expect continued, although slower, corporate
\nprofit growth. Furthermore, Chinese policy-makers are pivoting to stimulus,
\nwhich should begin to gain traction in the months ahead.<\/p>\n
\nrelative to the risks that we highlighted. And valuations for US and global
\nequities have fallen to levels not seen since February 2016. As a result, the
\nrisk \/ reward for stocks is becoming more appealing. We maintain a small
\noverweight to global equities in our tactical asset allocation.<\/p>\n","protected":false},"excerpt":{"rendered":"
\nextending the index’s losses to 9.4% since hitting an all-time closing high
\njust a few weeks ago on 20 September. With today’s decline the S&P 500
\nhas erased its price gain for the year. <\/p>\n","protected":false},"author":1,"featured_media":74726,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[1480],"tags":[1809,1655,2073,1651,1437,2087,2068],"_links":{"self":[{"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/posts\/74728"}],"collection":[{"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/comments?post=74728"}],"version-history":[{"count":0,"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/posts\/74728\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/media\/74726"}],"wp:attachment":[{"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/media?parent=74728"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/categories?post=74728"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/tags?post=74728"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}