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October Stock Market Outlook: Is The S&P 500 Ripe For A Correction?

China iTech Ghana
Sunday, October 3, 2021 | views Last Updated 2021-10-03T14:45:07Z
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After seven months of gains, the U.S. stock market finally satisfied its skeptics by declining in September. The S&P 500 tumbled 4.8%, notching its worst month since March 2020. 


The Dow Jones Industrial Average (DJIA) and Nasdaq Composite posted their weakest monthly showings in 2021 date.


In short, the market that seemed impervious to bad news finally showed it’s not.


The catalysts for the sell-off range from the China Evergrande crisis, surging Covid-19 delta variant cases, higher inflation, supply chain worries and the Federal Reserve’s plans to buy fewer bonds in the months ahead. While the bears may feel vindicated, the market’s bulls point to an S&P 500 that’s still up nearly 16% on the year.


There are plenty of reasons for both camps to believe they’re right about the market, especially with earnings season kicking off mid-month. Greg Bassuk, chief executive officer of AXS Investments, typically tracks two to three big factors that could dictate the market’s ups and downs in any given month, but he’s watching five factors in October—a telling sign of how investors are trying to make sense of everything going on right now.


“The million-dollar question is what does this mean for investors and what do investors do about it,” says Bassuk. “We definitely see the likelihood of higher volatility.”


Volatility could also prove to be pivotal in determining the market’s direction—and whether the selloff that began in September could worsen to become a full-blown market correction.


After seven months of gains, the U.S. stock market finally satisfied its skeptics by declining in September. The S&P 500 tumbled 4.8%, notching its worst month since March 2020. The Dow Jones Industrial Average (DJIA) and Nasdaq Composite posted their weakest monthly showings in 2021 date.


In short, the market that seemed impervious to bad news finally showed it’s not.


The catalysts for the sell-off range from the China Evergrande crisis, surging Covid-19 delta variant cases, higher inflation, supply chain worries and the Federal Reserve’s plans to buy fewer bonds in the months ahead. While the bears may feel vindicated, the market’s bulls point to an S&P 500 that’s still up nearly 16% on the year.


There are plenty of reasons for both camps to believe they’re right about the market, especially with earnings season kicking off mid-month.


Greg Bassuk, chief executive officer of AXS Investments, typically tracks two to three big factors that could dictate the market’s ups and downs in any given month, but he’s watching five factors in October—a telling sign of how investors are trying to make sense of everything going on right now.


“The million-dollar question is what does this mean for investors and what do investors do about it,” says Bassuk. “We definitely see the likelihood of higher volatility.”


Volatility could also prove to be pivotal in determining the market’s direction—and whether the selloff that began in September could worsen to become a full-blown market correction.

 

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  • October Stock Market Outlook: Is The S&P 500 Ripe For A Correction?

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