Brexit, the global recession of the sector manufacturing, the iimpeachment proposed by the Democrats against President Trump, the increasingly delicate negotiations between USA and China. These are the "October tests" that the markets will have to face according to Alessandro Fugnoli, Kairos strategist, who in the last episode of the video column "On the 4th floor” delivers a timely analysis of what could happen in the coming weeks.
"October is the month of repentance and atonement for the markets. – explains Fugnoli – Historically the biggest crashes were in October. And this happens because you usually arrive charged as a positioning and you therefore become particularly sensitive to any negative event. This year there is no shortage of difficult points for the market”.
In a scenario that could appear completely negative, however, there are gods factors that offset these concerns and instead let us hope for a more serene October. First of all the strong asupport that central banks are giving to their economies. “In America, in addition to the continuous rate cuts – we will have one in the coming weeks and one in December – we also have a recovery in Quantitative easing. It is not an official recovery, it is not defined as such, but in the end the effects are not very different from those produced by the QE we have become accustomed to in recent years”, analyzes the Kairos strategist.
In addition, the market remains cautious, speculation is lower than in previous years and therefore "there shouldn't be a surprise effect" continues Fugnoli who is also confident about the so-called "war of duties". “On the negotiations between the US and China, it is possible that a limited agreement will emerge which could calm the markets” and at the same time alleviate the difficulties of the manufacturing sector, predicts Fugnoli
“I would not lose faith in the fact that there will be a recovery at the end of the year”, concludes the strategist, also giving some anticipations on what the prospects for 2020 could be.
