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4th Quarter Opener in the Books, What’s Next for the Markets?

October 3, 2017
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Yesterday was a pivotal day in the markets with both the shooting in Las Vegas affecting hotel and firearm stocks but also because it marked the beginning of the fourth fiscal quarter.

The bull market showed no sign of wavering as the major indexes hit new highs. Marketwatch interviewed Robert Pavlik, chief market strategist from Boston Private Wealth to ask him about his opinion on the market going forward:

“l think what’s driving the market is just optimism about the fourth quarter, along with expectations that results from the third quarter will be similar to the second quarter,” said Robert Pavlik, chief market strategist at Boston Private Wealth. He also said hope that the Trump administration will rework tax policy is supporting buying appetite, although doubts linger about that coming to fruition this year.

The tax debate is likely going to be the most pivotal market catalyst we have seen since Trump took office in January. With healthcare already proving to be a failure, the vote on tax reform has the added effect of gauging Trump’s hold on power in both Houses. A misstep here could end the bull market prematurely.

Should everything go according to plan however, when would the markets turn? The Chicago Tribune asked Ed Yardeni of Yardeni research:

“The next bear market will start when the market anticipates the next recession — and turns out to be correct,” says market strategist Ed Yardeni, of Yardeni Research…. Yardeni has a date in mind: March 2019. He bases his determination on the average number of months the economy has continued to expand after it has reached its previous peak…. Yardeni arrives at March 2019, with the caveat that the date is not an official forecast.

Of course Yardeni’s prediction is incumbent on no major events fundamentally reshaping the markets’ outlook but if he is correct than the bulls will be running for another year and a half.

With investors eager to keep reinvesting in the winning stock market, the sheer volume of trading has helped drive stock. Until people are convinced otherwise, there is little reason for that to change.

As always, take some time to analyse your own position and do some extra research so that you can feel confident in your investments.

For Marketwatch’s report on the start of the 4th quarter, click here.

For the Chicago Tribune’s article on when the bull market will end, click here.

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