Greenbull Investments Sarl
Switzerland
1m
Markets closed October near record highs despite several potential challenges, including hawkish Fed signals, high-stakes U.S.-China trade negotiations, and mixed mega-cap tech earnings. The resilience demonstrates the bull market's durability, with the GreenBull portfolio well-positioned to benefit from these evolving dynamics. Fed cuts rates but signals caution The Federal Reserve delivered its expected rate cut, lowering the fed funds target to 3.75%-4%. However, Chair Powell's cautious tone regarding December cuts caught markets off guard. The probability of a December cut fell from 90% to 60%, and 10-year Treasury yields jumped to 4.08%. Despite the hawkish tone, the fundamental trajectory remains downward, with rates expected to settle around 3.5% through 2026. U.S.-China trade tensions ease significantly The Trump-Xi meeting delivered meaningful progress. The U.S. is extending its tariff pause on China for an additional year while cutting the fentanyl-related tariff in half. China is pausing raw-earth mineral export restrictions and restarting soybean purchases from U.S. farms. This provides critical relief for supply chains and corporate margins heading into the holiday season. Government shutdown drags on Now the longest on record, the shutdown is creating mounting disruptions. The Congressional Budget Office estimates nearly $40 billion in lost economic activity. However, private sector data hints at underlying resilience, with unemployment claims stable and hiring continuing at a steady pace. Markets are looking through the political dysfunction for now. Corporate earnings exceed expectations Two-thirds of reporting companies have beaten earnings forecasts. Mega-cap tech results were mixed - Microsoft and Meta disappointed, but Apple and Amazon delivered strong results. Fed Chair Powell pushed back on AI bubble concerns, citing robust earnings that contrast sharply with dot-com era fundamentals. Looking ahead Despite potential near-term volatility, the fundamental backdrop remains constructive. Less restrictive interest rates, tax cuts, easing trade tensions, and continued AI investment create a supportive environment. We maintain overweight equity positioning and view any pullbacks as opportunities to add quality positions at favorable prices.
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