Weekly Market Outlook November 2, 2014
Weekly Market Outlook:
Pfäffikon SZ, Switzerland – On the last day of October, the BOJ conjured a special surprise out of its hat. The Japanese money tap was turned open even further than it already was. This move made the potential influence of a deflationary spiral painfully clear. Investors celebrated their party and pushed several indices to new record levels. It was the final chord in a highly eventful and erratic month; October did uphold its reputation. Investors who kept a cool head and were not guided by the whims of the day can look back on a positive trading month. The S&P 500 ended the week with a gain of 2.72% and thus confirmed the current bullish market sentiment. A low interest rate combined with good business figures is simply a good climate for equities. We even think that interest rates can be expected to rise in 2016.
The earnings season is in full swing and is, in general, certainly not disappointing. In the coming week, the focus in Europe will be on the ECB, which also has to deal with the risk of deflation. The key question is what Mario Draghi, the president of the ECB, will do about it. The probability that the ECB will also turn open the money tap—despite fierce opposition from Germany—is increasing by the day. In the U.S., the focus will be on the ISM report, and, later in the week, we will gain insight into the U.S. labor market. The mid-term elections are also important as they may shift the balance of power in the Senate.
This material is communicated on November 2, 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.
