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The Cambridge Weekly – 29 October 2018


2nd November 2018



Stock markets suffer liquidity squeeze
During the recovery from February’s stock market correction, we wrote on these pages that the upsurge in equities – particularly in the US – felt a little uncomfortable. This was because the correction had not followed the usual pattern such corrections are known to follow, and therefore did not seem to provide a particularly solid base for a durable upturn. Sadly, our suspicion turned out to be justified.

Turning point in Asia?
The global stock market sell-off that’s been running for all of October struck Asian markets hard this week. Despite a cooling off in European markets and a higher opening for Wall Street futures, Thursday saw selling pressure turn eastwards, as both Japanese and Korean indices took big hits. Japan’s Topix slumped 3.1% to its lowest since September 2017, while South Korea’s Kospi fell 1.6%, putting it down more than 20% since January.

European Central Bank: What to do when QE ends
The European Central Bank (ECB) this week reaffirmed its commitment to begin winding down quantitative easing (QE) operations by the end of this year. This is despite what looks like choppy waters between now and the planned December end date.

+20% US earnings growth dismissed as ‘peak earnings’?
It’s quarterly reporting season again and pleasing double digit growth reports are coming in thick and fast. But judging from this month’s equity market rout, one would think the opposite.

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