As reported by Bloomberg, there are five key factors that will be hanging over global markets heading into Thursday’s action, as broader indexes continue to get routed, political discourse takes a nasty turn after bombs are sent to top Democratic-party members, major hedge funds see new growth opportunities in Asia, tech stocks are becoming an increasing concern for US markets as AMD misses broadly, while the Chinese government is seen liquidating major asset holdings without explanation.
Key quotes
“The sell-off in U.S. stocks accelerated, wiping out gains for the year in both the S&P 500 Index and the Dow Jones Industrial Average, as mixed corporate earnings and weak housing data fueled anxiety that rising prices will crimp economic growth. Treasuries rallied for a second day on demand for haven assets. The S&P extended its October rout to 8.8 percent, making it the worst month since February 2009.”
“Law enforcement agencies opened investigations of apparent explosive devices addressed to frequent targets of conservative vitriol, including Democrats Barack Obama and Hillary Clinton and cable network CNN, as the FBI warned more such packages may still be in circulation.”
“As the economic cycle in the U.S. and Europe nears its late stage, investors should consider “taking a turn to the East,” according to Bob Prince, who helps oversee the world’s biggest hedge fund at Bridgewater Associates. In a year, the economy of an emerging Asian bloc will expand by the size of the entire Mexican economy, Prince, the co-chief investment officer of Westport, Connecticut-based Bridgewater, said Wednesday at the C4K Investors Conference in Toronto. In five years, it’ll grow by the size of the Japanese economy, and in 10 years, by the size of the European economy, Prince said.”
“Advanced Micro Devices Inc., the second-largest maker of computer processors behind Intel Corp., gave a disappointing revenue forecast and missed third-quarter sales estimates on “weaker performance of its graphics chips. The stock slumped in extended trading, wiping out more than a fifth of the company’s market value.”
“Two funds linked to the Chinese government sold all of their holdings of stocks and bonds in the third quarter without explaining “why, leaving investors to guess about the implications for the country’s turbulent financial markets. Withdrawals from the CM Fengqing Flexible Allocation Fund and E Fund Ruihui Flexible Fund caused their combined assets to shrink to 296 million yuan ($43 million) at the end of the third quarter from 31.4 billion yuan in June, according to quarterly statements dated Wednesday. What remains are bank deposits and other unspecified assets. Both funds disclosed that 99 percent of their units were redeemed during the period, without providing details on who pulled the money and why.
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