Another Sharp Pullback, but Not the Start of a Bear Market

QMA

October 2018

The sharp pullback in stocks seen in October is another correction in an ongoing bull market, not the start of a bear market, according to QMA’s Global Multi-Asset Solutions team in a new Market Pulse. QMA bases their analysis on the still-solid macroeconomic outlook, valuations which have fallen back well within the average range, and a host of sentiment and technical metrics that suggest the market has been in the grips of the sort of panic frequently followed by a relief rally.

As such, they are now rotating some exposure from cash and core bonds to US equities based on what we believe to be temporary weakness. While US stocks could certainly fall further with the uncertainty of the mid-term elections looming, we are fairly confident we will see a typical post-election bounce and rally into year end.

 

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