Weekly Market Commentary 10/26/2018

Halloween has arrived early for investors as the ghosts and goblins are stirring up a virulent storm in the stock and bond markets. To be sure, volatility has been ramping up throughout the month, reflecting the steady drumbeat of crosscurrents buffeting investor sentiment. These include mounting concerns over rising interest rates, a Fed policy that is the target of a critical president, the still-unresolved trade conflict with China, slowing global growth and a potential debt crisis overseas sparked by a budget deficit in Italy that violates European Commission rules. But the turbulence reached a boiling point this week, as a six-day rout in stock prices wiped out all of the year’s gains by Wednesday. After a potent rally on Thursday returned the S&P 500 to the plus column, the market sank again on Friday driving the index back into negative territory.