29 October 2018
Bassanese Bites: Uneasy calm – Week beginning: 22 October 2018
An “uneasy calm” is perhaps the best way to characterise global markets last week – with little in the way of major events and investors only left with their nerves to deal with. The release of the latest Fed minutes only affirmed its intent to keep raising rates – which supported the $US – while tensions between Italy and the EU also added to investor caution.
While oil prices eased due to a strong US inventory build, new doubts also emerged over whether Saudi Arabia is willing (and able) to boost supply in coming months to make up for the sanction-induced looming reduction in Iranian exports.
Although early days, America’s earnings reporting season also remained encouraging – according to FactSet, of the 20% of S&P 500 companies that have so far reported, 80% have beaten expectations. Given investor nervousness, however, these results were dulled by growing talk of a possible post-tax cut slowdown in US earnings growth in 2019.
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