Weekly Market Outlook October 26, 2014
Weekly Market Outlook:
Pfäffikon SZ, Switzerland – In a crucial trading week, the S&P 500, in particular, showed itself in its best light (+ 4.12%) and pulled up other indices. Noteworthy is that the latest Commitments of Traders Report (COT) of the Commodity Future Trading Commission in the U.S. showed an unusual activity in the futures in the S&P 500. Investment banks have repurchased nearly 30,000 sales contracts in the S&P 500 and have simultaneously expanded their long positions. This is without doubt a bullish signal. In addition, several hedge funds have further reduced their protection against a possible stock market decline. There might be a chance that any future downturn will be used as an opportunity by asset managers to expand their existing long positions further. We note that the concerns about the German economy seem to be exaggerated.
The coming week is about the European Banks’ stress test and the business figures. The quarterly earnings season is in full swing. Additionally, the macro agenda is well stocked where the eyes will focus mainly on the Fed on Wednesday. The explanation of the Fed is more important than the decision itself; an interest rate increase is in our opinion – after all the recent turbulence – to be expected at the end of 2015.
This material is communicated on October 26, 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.
