Corporate earnings season continues to impress as out of the 15% of S&P 500 companies that have already reported, 83% have bested analyst expectations. On Thursday, the markets were roiled by volatility as a sharp drop in Chinese equities produced a ripple effect that extended itself into U.S. equities, causing a 300-point drop by the close of the market.
Nonetheless, U.S. equities are down for the month of October after the Dow lost 1,300 points in two consecutive days last week. Thus far, the Dow is down just over 3% in October after posting a gain of almost 1.9% the previous month and 2.16% in September.
“This whole thing started a few weeks ago when (Federal Reserve) Chairman Jerome Powell said we’re a long way from neutral,” said Brent Schutte, chief investment strategist for Northwestern Mutual Wealth Management. “What we’re seeing here is a good old fashion valuation repricing.”
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