“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.
This material is communicated on October 14, 2018 by 1324 | 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 1324 | by Thirteen Asset Management AG and may not be reproduced or otherwise disseminated in whole or in part without prior consent from 1324 | by 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.