The stock market has been tumbling lately, which means that dramatic media headlines are roiling investor sentiment far and wide. As a result, recency bias threatens to overwhelm otherwise rational minds. To be fair, October looks pretty grim and the latest market rout could roll on… or not. But before you let your emotional demons take over all your decisions, take a moment to consider the historical perspective, which tends to be overlooked in times like these.
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Suspected package bombs sent to Obama, Clinton and CNN: Reuters
Is Trump’s diplomacy pushing China and Japan closer together? CNN
Worries over a trade war and tariffs are key factors in market selloff: CNBC
Is the Fed making a mistake on inflation outlook and raising rates? Yardeni.com
US Composite PMI for Oct: economic growth ticked up to 3-mo high: IHS Markit
Home Price Index for US up 0.3% in Aug as mid-Atlantic slumped 0.7%: HW
Fed’s Beige Book: wages, prices rising at “modest to moderate” pace: MW
New home sales in US fell to lowest level in nearly 2 years in Sep: Reuters

Equity markets in the Mideast remain the performance leader this year as selling takes a toll on the world’s other major stock market regions, based on a set of exchange-traded funds as of yesterday’s close (Oct. 23).
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Saudi prince opens investment conference under cloud of Khashoggi case: AP
Italy and EU on collision course over debt and budget: The Atlantic
Trump accuses Fed chairman of threatening US economy with rate hikes: CNBC
Retail investors buy the dip in stocks as institutions sell: Bloomberg
Richmond Fed Mfg dips in Oct after setting record high in Sep: MarketWatch
Eurozone growth in Oct Sep fell to slowest pace in over two years: IHS Markit

The government’s initial estimate of third-quarter GDP for the US is on track to decelerate to a 3.3% increase in the release due at the end of this week, based on the median for a set of nowcasts compiled by The Capital Spectator. That’s a solid gain, but the estimate marks a substantially softer pace vs. the strong 4.2% rise reported for Q2.
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Turkey’s president says there’s evidence that Khashoggi killing was planned: CNBC
Saudi foreign minister pledges full investigation into Khashoggi killing: Reuters
Trump vows to use military to address growing migrant caravan: Fox
US Navy warships sail through Taiwan Strait: ABC
Trump says US will build up nuclear arsenal: BBC
Supreme Court halts Commerce Secretary’s deposition re: census: Politico
Japan’s Abe will meet China’s Xi this week: CNBC
Leading Indicator of remodeling activity: slower growth for 2019 expected: JCHS
US jobless rate is lowest in decades, but wage growth remains weak: NY Times
Former Fed Chair Volcker sees trouble brewing just about everywhere: NY Times
Chicago Fed Nat’l Activity Index: US growth moderated slightly in Sep: Chicago Fed

Real estate investment trusts (REITs) in the US posted the biggest gain by far for the major asset classes last week, based on a set of exchange-traded products. By contrast, last week’s biggest loser: equities in emerging markets.
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China criticizes Pompeo’s warning of hidden risks in Chinese investments: Reuters
US Treasury Secretary defends upcoming trip to Saudi Arabia: NY Times
Turkey’s president to reveal ‘details’ in killing of Saudi journalist: USA Today
Saudi Arabia: no plans for an oil embargo amid Khashoggi crisis: CNBC
Trump: US will pull out of decades-old nuclear arms treaty with Russia: CNN
Moody’s cuts Italy’s debt to one notch above junk status: Reuters
GOP leaders are clueless about Trump’s tax-cut plan: Bloomberg
US existing home sales slumped to three-year low in September: Bloomberg
China’s stock market surged for a second day on Monday: CNBC

● The Behavioral Investor
By Daniel Crosby
Summary via publisher (Harriman House)
In The Behavioral Investor, psychologist and asset manager Dr. Daniel Crosby examines the sociological, neurological and psychological factors that influence our investment decisions and sets forth practical solutions for improving both returns and behavior. Readers will be treated to the most comprehensive examination of investor behavior to date and will leave with concrete solutions for refining decision-making processes, increasing self-awareness and constraining the fatal flaws to which most investors are prone. The Behavioral Investor takes a sweeping tour of human nature before arriving at the specifics of portfolio construction, rooted in the belief that it is only as we come to a deep understanding of “why” that we are left with any clue as to “how” we ought to invest.
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The US economic trend remains solidly positive, but signs of slowing growth persist. For now, the risk of recession remains virtually nil and it’s unlikely that a downturn will start in the immediate future, according to broad set of indicators. But projections for next year, which remain highly speculative at this point, suggest that recession risk will rise – a forecast that deserves close attention as new data arrives in the weeks ahead.
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