Sentiment is currently leaning on the good end (which is odd for October) despite the many many risks in the markets right now.
Trade Talk Speculations
Washington and Beijing are back to discussions. raising prospects of a wider agreement next month which can be signed by Presidents Trump and Xi on the sidelines of the Asia-Pacific Economic Cooperation meeting in Santiago, Chile on November 16-17, 2019. Expect the hear some good news prior to then since it takes time to put into writing verbal agreements.
This is giving markets an underlying positive sentiment until then.
Brexit Impact on Markets
Boris Johnson will probably try one last time to put and agreement through parliament in order to avoid a big mess which could lead to a possible winter election.
On Friday EU leaders are scheduled to decide whether or not to grant the UK a 3 month (or shorter) extension which Johnson would be forced to accept due to the Benn Act.
Johnson has said that he will be leaving the UK next week with or without a deal but all of Europe is in favour of an extension except France, so an emergency meeting in Brussels on Monday could occur.
Indicators to keep an eye out for
In addition to China and Brext, traders will actually be paying attention, once again, to Economic data (global manufacturing and consumer confidence) and the press release after Fed cuts rates next week to see if Powell will change words indicating slower cutting in the future.
Earnings will also matter but since share buybacks have stalled due to earning season. Historically october has been a down month but we aee seeing markets rising like three no tonorrow. The music will eventually stop. It can’t rise forever. The question is when and whether you are prepared when it’s ready.
Patyk will be buying puts on many equities including AAPL (already own bearish position) who reports next week.
Also keep an eye on Turkey but its hard to believe McConnell will succeed in telling trump what to do in terms of not inviting Erdogan to The White House next month. Turkey may cut rates but TUR ETF may rise this week.
Recession indicators
Recession indicators including PMI under 50 and Repo injections are still there. In fact Repo injections had been increased to $120 billion dollars. It’s a matter of time the dominoes will come tumbling down. It is important to keep yourself sharp as we get closer to a possible 2020 recession or 2021 recession. Some are preparing for this upcoming recession while others are getting their cards ready to profit from a recession. Remember, a recession is only a transfer of wealth from those who are unprepared to those who are prepared, be sure you are one of the prepared ones.
Disclaimer: This is not investment advice. This economic report gives you a quick snapshot of our interpretation of what’s happening around the world. Do your own research when investing.