"October Surprise" Is Not About Elections This Year But Corporate Earnings

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  • Third quarter earnings growth for S&P 500 companies is at risk of being negative for the first time in three years.
  • Though some risk assets softened in October, all are solidly positive year to date.
  • Monetary stimulus has stabilized markets, aided housing and the consumer, but alone it is inadequate; pro-growth taxation, spending and regulatory policy is necessary.
  • While the presidential election is important, Congress will ultimately control spending and tax legislation.

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