No one looks smart calling for stock markets to go up, but you can look smart or you can be right so here’s what I’m thinking:
The market got skittish in October.
To me, it wasn’t any single thing but a whole bunch at once:
September saw an intense rally in stock marketsTrump and China picking a new trade fightThe government shutdownThe regular geopolitical uncertainty
Let’s skip ahead to the end of the month and think about what’s possible.
Stocks have consolidated and October seasonals are good (getting even better in Nov/Dec)Trump continues to insist China is fine and leaders will meet Nov 1The government shutdown will inevitably endThere is the tail risk of a ceasefire in Ukraine
Now I’m not saying any of those things are going to happen, and the timeline on others could bleed into November but I think the risks to all of those are positive developments. The drag could be corporate earnings reports, which will really start to heat up but so far companies have been fairly upbeat. At worst I think it’s a two-way risk.
This article was written by Adam Button at investinglive.com.