Weekly Market Outlook October 14, 2018

“I think the Fed is making a mistake. It’s so tight, I think the Fed has gone crazy.” – President Donald Trump

Pfäffikon SZ, Switzerland – All of a sudden, investors are nervous, which was not favorable for the S&P 500 last week. It is difficult to tell where the sales pressure came from and why it was so fierce. Many point to the interest rates, but that is too simple. Sowing panic does not make any sense. The correction was intense, but not uncommon. The momentum in the market has undoubtedly deteriorated, especially now that the S&P 500 moves around the 200-DMA: technicians get very nervous about it. From a fundamental point of view, there is no reason to be concerned, and the recent decline can be labeled as “noise.”

The next week might be exciting as well. Companies open their books with the consensus that they perform 19% (!) better than the previous quarter. Perhaps this is the basis that the market needs to work on recovery and new all-time highs. The momentum may have got a bite, but the bull market is unaffected.

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