S&P 500, FTSE, DAX Caught Between Earnings and Geopolitical Tension

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Fundamental Forecast for Equities: Neutral

  • Equities remained mired in geopolitical tension this week as strong corporate earnings worked to offset some of the risk-off sentiment
  • The two themes battling for supremacy will continue into next as resolutions are few-and-far between
  • Trade wars remain a headwind for equities, tempering growth and earnings expectations

SP 500, DAX, FTSE, Nikkei Face Conflicting Themes

Thus far, October has seen global equities falter. Dramatic intraday price swings and a shifting backdrop have resulted in higher volatility and investors have been left to question which themes will rule. In a broad sense, the two themes facing equities have been geopolitical tension and a robust earnings season.

On the bearish side, markets have had to cope with tense political discourse in regards to Saudi Arabia, Italy’s budgetary woes and an underwhelming EU-Summit on Brexit. While the latter has been concluded and talks will progress in the future, the other two conflicts are still very much at play. Most notably, investors and speculators should be concerned about the integrity of the European Union and the

Article source: https://www.dailyfx.com/forex/fundamental/article/special_report/2018/10/19/SP-500-FTSE-DAX-Caught-Between-Earnings-and-Geopolitical-Tension.html