Volatility ahead. Although September was a positive month, despite some scary headlines, October could show much more volatility. The continued and rising political risks, combined with weakening economic data, are likely to put markets under stress. At the same time, as long as the fundamentals remain solid, they should act as support for markets. There is the real possibility that better-than-expected earnings reports could provide further support.
In other words, October is likely to be a bumpy ride—much more so than September. This is no surprise, as October has often been turbulent. But the good news is that despite weakening, the fundamentals still remain supportive. Any damage that we get (and we may) should be limited as long as the economy continues to grow.
Brad McMillan is the chief investment officer at Commonwealth Financial Network.