Investors Look to Central Banks for Relief
Worries about a slowdown in global growth, geopolitical problems and fears of ebola culminated in a volatile month for the markets. In mid-October, the S&P 500 fell to nearly 10 percent off its September peak, but the blue chips ultimately held just shy of that benchmark. It would have been the first such correction since 2011. Read more about Stimulus Eyed
Though it failed to hold most of its early gains, the U.S. market ended a losing streak today, after the biggest three-day selloff since 2011 saw the S&P 500 fall nearly 5 percent since last Thursday. The early third-quarter results for the companies that have reported have been generally good. As of this writing, of the 34 S&P 500 companies who have reported, 25 (73 percent) beat expectations while 24 (70 percent) beat on sales, suggesting that overall quarterly corporate results should be along historical norms. Read more about Be Alert but Don't Panic 10-14-14
The International Monetary Fund (IMF) released a somber quarterly World Economic Outlook report today, highlighting growth concerns worldwide. With a penchant for overly optimistic predictions, not surprisingly it has once again had to revise downward its previous growth projection (for the ninth time in the last three years). The IMF now forecasts 2014 global growth of 3.3 percent. Previously, in July, the organization had predicted 3.4 percent growth, and before that, in April, 3.7 percent. The IMF also cut its 2015 growth outlook to 3.8 percent from 4 percent. Read more about The IMF Cuts Again 10-07-14
In demanding the resignation of Chief Executive C.Y. Leung and the right to freely select their own candidates to government, tens of thousands of protestors have flooded Hong Kong’s streets and effectively shut down major parts of the city. While there were serious clashes with police over the weekend, plus numerous injuries and arrests, compared to other protests globally, so far this has been a remarkably peaceful affair. Read more about Hong Kong at a Standstill, But China Keeps Moving 09-30-14
In the Indicator section, we review how our indicator predictions from last month fared (hint: they were on the money) and take a look at what they are saying for stocks, bonds, and precious metals for the near term. We adjust the indicator-related ETFs in stocks and precious metals.
We also examine what the Scottish referendum and explore its implications on the U.K. and the rest of Europe.
See the issue for details.
As we write to you, the latest two-day Federal Open Market Committee meeting to determine the next step on monetary policy is in progress. Market participants will no doubt scrutinize the FOMC statement, to be released tomorrow afternoon, for hints of changes in the Fed’s expected course of action in regards to the federal funds rate. Read more about Potential Market-Moving Events Ahead 09-16-14
U.S. stocks declined for the second day in a row after the S&P 500 last week set an all-time high. Concerns that the Federal Reserve may hike interest rates sooner than expected are to blame. A research letter published by the San Francisco Federal Reserve Bank states that investors may be under-appreciating the “extent to which short-term interest rates may vary with future news about the economy.” Specifically, the piece suggests that the public may be expecting more accommodative policy than do Fed decision makers. Read more about Stocks Ripe for Correction 09-09-14