Read The News So You Don’t Have To – Market News (October 25, 2018)

by ogordained

UNITED STATES

  • The Markit PMI manufacturing activity index is trending higher
  • Markit PMI price indices keep strengthening, pointing to higher inflation ahead
  • New home sales are near the 2-year lows while inventories are climbing
  • The S&P 500 gave up 3% and is now down for the year
    • Concerns are growing about a slowdown in earnings growth, tariffs, higher rates, a stronger US dollar, and global economic weakness
  • The NASDAQ is down more than 10% putting it in correction territory
    • The semiconductor sector is having its worst month since the Great Recession
  • The VIX closed above 25 for the first time since February
  • There are two ways to look at this, stocks are either very cheap right now or forecasted earnings estimates are way too optimistic
    • Companies focused on Research & Development are being punished in favor of frims known for share buybacks
  • Small cap stocks are nearing bear territory
  • I think it’s very important to be aware that it’s individual investors “buying the dip” as institutional investors have kept their money on the sideline

OTHER

  • Iron ore futures are continuing to soar in China
  • Copper prices are dipping
  • Gold is being purchased by Central Banks again
  • Crude oil continues its downward march
  • Credit contraction in Turkey is the worst its been since 2002
  • South Korean stocks are in bear territory
    • Q3 GDP growth disappointed (Actual 0.6% | Expected 0.8%)
  • Japan’s manufacturing activity grew this month
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CHINA

  • The yuan is at multi year lows
    • Lending to small businesses is grinding slower
  • The Belt & Road initiative is slowing new development

 

 

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