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Daily Capital

What Moved the Markets in October?

October Market-Movers – An Overview

After a slow start, global equities marched higher in October, driven again by central bank monetary policy and encouraging signs in trade discussions with China. The Fed cut rates for a third time, but signaled there would be a pause to gather more data. This was sufficient to appease investors who have grown dependent on low interest rates but also increasingly wary of negative rates overseas. Corporate earnings also supported prices. Absolute growth is trending toward a roughly 3% decline from last year, but this is still ahead of expectations. Profits are expected to resume growth in Q4.

How is Investor Sentiment?

In our view, the reaction to earnings is a prime example of the advantage of widespread pessimism. Despite low unemployment and a long bull market, most people seem to be either complacent or scared. Many believe recession is imminent despite relatively little direct evidence of that. This creates an environment where no bad news ends up being good news for stocks, especially when the primary alternatives are low yielding bonds.

Want a clear view of your retirement?

On The Trade War

On trade, the framework for a “phase one” deal was outlined, indicating a pause or minor cut in existing tariffs in exchange largely for increased agricultural purchases. The fact that the two sides are having constructive conversation is a positive, but in our view the real issues lay around intellectual property and forced technology transfers, which will be thornier subjects to tackle. We see equal upside and downside risk from trade for the remainder of the year.

Read More: Market Commentary

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The content contained in this blog post is intended for general informational purposes only and is not meant to constitute legal, tax, accounting or investment advice. You should consult a qualified legal or tax professional regarding your specific situation. Keep in mind that investing involves risk. The value of your investment will fluctuate over time and you may gain or lose money.

Any reference to the advisory services refers to Personal Capital Advisors Corporation, a subsidiary of Personal Capital. Personal Capital Advisors Corporation is an investment adviser registered with the Securities and Exchange Commission (SEC). Registration does not imply a certain level of skill or training nor does it imply endorsement by the SEC.

Craig Birk leads the Personal Capital Advisors Investment Committee and serves as Chief Investment Officer. His focus is translating improvements in technology into better financial lives. Craig has been widely quoted in the Wall Street Journal, Bloomberg, CNN Money, the Washington Post and elsewhere. Prior to Personal Capital Advisors, he was a leader within the portfolio management team at Fisher Investments, helping assets under management grow from $1.5 billion to over $40 billion. Craig graduated from the University of California at San Diego and has earned the Certified Financial Planner® designation.

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