Market Overview Analysis by Brad McMillan covering: S&P 500, iShares Core S&P 500 ETF, SPDR® S&P 500, S&P 500 Futures. Read Brad McMillan 's latest article on Investing.com
Stock markets dropped for the third consecutive month in October, with financial markets getting hit by higher interest rates across the board. The U.S. indexes were down in the low-single digits for the month, which left thebelow their long-term trend lines. International markets also pulled back by roughly the same amount. Even fixed income was down. Financial markets were clearly in a risk-off mode.Worries about interest rates and inflation drove the weak performance during the month.
As we move into the end of the year, the key issues will be whether growth continues at a slower rate and inflation continues to move down. Market expectations on rates have changed rapidly, and if the Fed continues to be more dovish, that positive reaction could continue. That said, given that the underlying reason for the Fed’s dovishness is continued slower growth and higher rates, any reversal of those trends could lead to rates rising again.
And that is the bottom line here. We’ve had three difficult months, largely due to rising rates. Looking forward, there are signs that this trend may have peaked and started to reverse, which would be good for markets. While there are many economic risks, the trends are currently positive.Looking forward, we seem to have several tailwinds. Growth is slower but still healthy. Rates are down, but so is inflation. Earnings are up, and valuations have stabilized.
Dollar regains some lost ground as US yields bounce back Gold and oil edge lower - geopolitical risks getting priced out? Aussie sinks despite RBA rate increase, Fed speakers...Gold Prices Dip as Dollar Strengthens and Safe-Saven Demand Wanes Gold price dropped by 0.73% on Monday amid a strengthening dollar and a decline in demand for safe-haven...We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other.
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