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On the latest edition of Market Week in Review, Senior Investment Strategist Paul Eitelman and Rob Cittadini, director, Americas institutional, discussed the likely catalyst behind last month’s market volatility, the U.S. employment report for October and potential market impacts of the Nov. 6 U.S. midterm elections.

Are better times ahead for markets after a rough October?

With the books closed on a volatile October, last month’s nosedive in markets looks like a healthy correction rather than the start of a bear market or a prelude to an economic recession, Eitelman said. He believes that worries over lofty expectations for U.S. earnings drove some of the downturn, but noted that economic fundamentals in the U.S. remain pretty good. “With this in mind, while we probably can’t say deterministically that the market correction is in the rear-view mirror, there’s been more incrementally encouraging news the week of Oct. 29 that’s helped lift markets,” he said. For instance, a phone call between U.S. President Donald Trump and Chinese President Xi Jinping on Nov. 1, which Trump described as helpful in moving trade discussions forward between the two countries, led to broad gains that day.

Overall, as of mid-morning on Nov. 2, the S&P 500® Index was up roughly 2.3% the week of Oct. 29, with emerging markets surging 5.6% on the week, as measured by the MSCI Emerging Markets Index.

U.S. economy powers on with 250,000 job additions in October

The U.S. employment report for October, released Nov. 2 by the Bureau of Labor Statistics, showed a continued strength in the nation’s economy, Eitelman said. “The U.S. added 250,000 jobs last month—a figure which was well above consensus expectations, and more than sufficient to keep strengthening the labor market over time,” he stated. Eitelman added that the unemployment rate held steady at a 49-year low of 3.7%.