Bull market - end or opportunity for investors?

Just in time for the start of the cold season, October is obviously also bringing us dark prospects in terms of share prices: At their peak, the DAX 30 and Euro Stoxx 50 fell by around 10% based on daily closing prices. The US leading index S&P 500 lost around 6% in this view.

But investors also withdrew money from corporate bonds. Federal bonds and U.S. government bonds, so-called Treasuries, were in particular demand. Turnover on the futures markets shot up sharply in some cases during the sell-off.

Is the dark mood justified?

The Ukraine crisis, fighting in Syria, possible deflation in Europe, fears of Ebola - at the moment, we are virtually inundated with negative headlines by the media. And all too often, these day-to-day political conflicts and collective fears are conflated with the end of the bull market.

We already asked the question here in mid-August whether the bull market is now really at an end. The answer was clear: the Ukraine conflict and the sanctions against Russia are not a reason for the end of the stock market upswing. Do we have to give a different answer today?

Negative developments always mean opportunities

Let's get it straight from the start: We see the lower prices on the stock markets as an entry opportunity. Although the announcement of the stress test results for European banks is due next weekend - which could cause fluctuations on the stock markets - the correction is not yet complete in chart terms. It is just a correction of the uptrend and not a trend reversal.

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The U.S. economy remains on course for success

The growth forecasts for the United States for the second half of 2014 and for 2015 were only recently confirmed by the IMF. And American companies are also showing themselves to be in good shape during the currently ongoing reporting season. From the S&P 500 index, 82 companies had submitted their balance sheets for the third quarter by last Friday (17.10.2014).

68% of US companies have already exceeded analysts' earnings expectations: Instead of the expected average profit growth of 4.6%, the companies generated a full 5.1% more.

The continued good development of employment figures - in addition to low interest rates and the sharp drop in the oil price - also speaks for a continuation of the American success story.

In addition, the French and German governments are working on programs to increase investment, which should have a positive impact on the economy. And progress is also being made in Spain, France and Italy on the structural reforms that are regularly called for.

Although all these points will not lead to a boom, the upswing in the euro zone should pick up speed again in the coming months. Emerging markets are also showing signs of stabilization.

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Conclusion: Entry opportunities despite increased fluctuations

Overall, it can be said that global economic growth continues to support rising corporate profits and thus rising share prices in exness forex broker singapore. Thanks to the recent correction, equity valuations have also returned to attractive levels.

According to surveys, a broad majority of fund managers also see this market phase as an entry opportunity. However, risks have increased, which is why stock market fluctuations are likely to remain high. However, we continue to see an upward trend.