Weekly Market Outlook October 19

Weekly Market Outlook:
Pfäffikon SZ, Switzerland – The last few weeks, for investors, have been only about three issues: Ebola, Europe, and earnings. Ebola creates panic, and Europe causes (deflation) concerns, but it is about the earnings. As long-term investors, we cannot occupy ourselves with every problem in the world. The focus is, therefore, on the companies in which we have invested, and, to date, we are not dissatisfied with the figures already published. If deflation becomes an issue, then structurally lower prices are in the offing, but we have not reached that stage yet.

After much uproar, the S&P 500 ended the week with a loss of only 1.02 percent. The question that concerns us is whether the remarkable revival of last Friday was connected with the option expiration or has a more structural character. Partially for this reason, it is too early to draw the conclusion that all the commotion has ended. In the coming weeks, a new downward outbreak can certainly not be excluded. We look forward to the company’s figures, especially in Europe, and to the associated outlooks. Interestingly, the question of a possible recession in Europe is already visible, and companies will adjust their forecasts downward. On the other hand, the relatively cheap Euro is operating in its favor. These two components will be crucial to the further stock price trend in Europe.

This material is communicated on October 19, 2014 by Thirteen Asset Management AG, Rietbrunnen 20, 8808 Pfäffikon SZ, Switzerland. This material is for information purposes only and is not intended to be a solicitation or invitation to invest. Any organizations or products described in this material are mentioned for reference purposes only. This material is intended only for investment professionals and professional clients and must not be relied upon by any other person. It is proprietary information of Thirteen Asset Management AG and may not be reproduced or otherwise disseminated in whole or in part without prior consent from Thirteen Asset Management AG. Alternative investments can involve significant risks and the value of an investment may go down as well as up. There is no guarantee of trading performance and past or projected performance is not a reliable indicator of future performance. We recommend to consult your bank, investment and/of tax adviser.