KUALA LUMPUR (Oct 13): Investor sentiment turned bearish over the last week as the International Monetary Fund (IMF) downgraded its global economic growth forecast to 3.7% for 2018 and 2019 from 3.9%, the first downward revision since July 2016 amid escalating trade tensions between US and China.

A spike in the US bond yields also triggered a selldown in risky assets, resulting in most global equity markets having their worst week since February. The volatility also led to fears of the October effect – the theory that stocks tend to decline this month.

As markets tumbled, US President Donald Trump slammed the Federal Reserves and declared that “the Fed has gone crazy”.

However, market observers point out that Trump’s trade war with China also played a part in driving stock markets lower.

Could these factors put an end to the longest bull run in the US’ history?

According to the cover story in the latest issue of The Edge, investors believe the earnings season by the US corporates which began on Friday will be a key indicator to look out for. There is also the mid-term election in US about a month from now, which could provide further clarity to investors.

To find out more on the outlook for global and local equity markets, pick up the latest issue of The Edge.

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